On the go: The aggregate surplus of the 5,318 defined benefit schemes in the Pension Protection Fund 7800 Index has increased by £19.5bn in April.
According to the figures published on Tuesday by the pensions lifeboat, the DB schemes surplus reached £53.7bn at the end of April, from a surplus of £34.2bn at the end of March.
The latest figures provide the estimated funding position, on a section 179 basis, for the DB pension schemes potentially eligible for entry to the PPF.
The funding ratio increased from 102 per cent at the end of March 2021 to 103.1 per cent.
Total assets amounted to £1.78tn at the end of April, while total liabilities stood at £1.73tn. There were 2,622 schemes in deficit and 2,696 schemes in surplus.
Lisa McCrory, PPF’s chief finance officer and chief actuary, noted that the funding position of the PPF 7800 Index has seen a small improvement in April, which is “primarily due to an increase in the value of equities”.
“For only the second time in the index’s 15-year history there are now more schemes in surplus than in deficit.”
She added: “The 7800 Index will be updated next month to take account of the recently released A10 s179 assumptions, which is anticipated to improve the funding position further.
“Despite these positive signs of recovery, we remain cautious in this challenging environment.”
Sion Cole, head of UK fiduciary business at BlackRock, pointed out that it is “encouraging to see this is the third month in a row that DB pension scheme funding levels have improved”.
He said: “The Bank of England just last week signalled that the UK is bouncing back from the Covid pandemic at a faster pace than expected, upgrading 2021 [gross domestic product] forecasts to 7.25 per cent from 5 per cent, and reducing the pace of quantitative easing.
“The central bank’s outlook outlines the reality and strength of the economic restart that is under way, and the albeit modest reduction in quantitative easing signals confidence from policymakers.
“The BoE expects inflation to return to target after a moderate overshoot; however, we believe that global inflation remains underappreciated on a strategic horizon.”
