PPF 7800 deficit falls to £6.4bn over April

The PPF 7800 deficit fell to £6.4bn over the month of April, down from £43.9bn at the end of March, according to the Pension Protection Fund.

The reduction in the deficit by £37.5bn means that the funding level of the index has increased to 99.6 per cent, up from 97.4 per cent at the end of March. The funding position is also better than this time last year, when the deficit was £40.1bn, and the funding level was 97.5 per cent in April 2018.

Within the index, total scheme assets amounted to £1,649.2bn at the end of April 2019. Total scheme assets stayed broadly the same over the month and increased by 4.4 per cent over the year. Total scheme liabilities were £1,655.6bn at the end of April 2019, a decrease of 2.2 per cent over the month and an increase of 2.2 per cent over the year.

Furthermore, the aggregate deficit of all schemes in deficit at the end of April 2019 is estimated to have decreased to £157.2bn from £181.1bn at the end of March 2019. At the end of April 2018, the equivalent figure was £167.9bn.

At the end of April 2019, the total surplus of schemes in surplus increased to £150.8bn from £137.2bn at the end of March 2019. At the end of April 2018, the total surplus of all schemes in surplus stood at £127.8bn.

The number of schemes in deficit at the end of April 2019 decreased to 3,089, representing 56.7 per cent of the total 5,450 defined benefit schemes. There were 3,267 schemes in deficit at the end of March 2019 (59.9 per cent) and 3,287 schemes in deficit at the end of April 2018 (60.3 per cent).

The number of schemes in surplus increased to 2,361 at the end of April 2019 (43.3 per cent of schemes) from 2,183 at the end of March 2019 (40.1 per cent). There were 2,163 schemes in surplus at the end of April 2018 (39.7 per cent).

Commenting, BlackRock head of UK strategic clients, Andy Tunningley, said: “Much like the public enjoying the sunny weather over the Easter weekend, UK defined benefit pension scheme trustees will look back fondly on April as funding levels rebounded…growth assets were helped by equity markets continuing to push higher, largely driven by a positive start to the Q1 earnings season and the continuation of muted geopolitics throughout the month.

“Rising gilt yields meant liabilities fell, although yields remain below their end February levels. So despite liabilities rising £50bn over the first four months of the year, the strong start to the year from risk assets (with most schemes seeing 10+ per cent returns) means UK pension scheme funding levels are 1.6 per cent higher than where they ended 2018 with aggregate deficits down £25bn.”

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