Five key charts from the PPF's Purple Book

Scheme funding in the defined benefit universe rose on both an s179 and full buyout basis, which the PPF attributed to the combined impact of higher gilt yields on liabilities and higher equity markets on assets.

The book also noted, however, lower gilt yields had led to an 8 percentage point drop in scheme funding since March 2014.

Source: PPF Purple Book

This may have led to the most notable finding of the report, the slowing of inflows to gilts and fixed interest assets. Allocations had been rising steadily since 2006 before faltering this year.

As before, larger schemes tend to have higher allocations to these assets. To quote the report: "The proportion of assets held in gilts and fixed interest and in hedge funds tends to increase with scheme size. The proportions held in insurance policies and cash and deposits tend to decrease with scheme size."

Source: PPF Purple Book

The national insolvency rate continued the gradual, continuous fall it began two years ago. The PPF insolvency rate also fell sharply in the past three quarters.

Source: PPF Purple Book

Data showed the decrease in equity allocation has slowed, possibly reflecting increased faith in the equity markets. However investment in UK equities has continued its inexorable decline, as they seem to be replaced – at least in part – by overseas equities.

Source: PPF Purple Book

Predictably, the percentage of schemes closed to future accrual rose, to 32 per cent from 30 per cent last year. The percentage of schemes closed only to new members fell by 1 percentage point to 53 per cent from 54 per cent last year, as more schemes make the second step of closing to future accrual.

In a blog post about the release of the Purple Book, Alan Collins, director at consultancy Spence & Partners, predicted that the number of schemes closed to future accrual would begin to rise more quickly in coming years.

Source: PPF Purple Book

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