The accounting deficit of defined benefit (DB) pension schemes for the UK’s 350 largest listed companies fell by £24bn over the course of April, according to Mercer’s latest Pensions Risk Survey.

The deficit stood at £45bn at the end of the month, a decrease from £69bn at the end of March.

Mercer reported that liabilities fell from £837bn at the end of March to £784bn at the end of April, which was driven by further increases in corporate bond yields.

Asset values also dipped to £739bn compared to £768bn at the end of March.

Mercer UK wealth trustee leader, Tess Page, commented: “The month end position has again shown an improvement month-on-month and is now back at a level last seen in April 2020. The main driver of the change has been the increase in bond yields. These improvements are good news in the current economic environment.”

She added: “This week has also seen the Pensions Regulator (TPR) issue its 2022 Annual Funding Statement which highlights TPR’s general expectations of all DB schemes. The Statement emphasises TPR’s expectations for strong governance and robust integrated risk management especially in the context of the current economic and geopolitical situation.

“Even schemes that have good arrangements in place need to keep them under review, and it is likely that all schemes, even the best prepared, will need to take some action in view of the current climate.”

Figures used for the monthly Pensions Risk Survey from Mercer relate to approximately 50% of all UK pension scheme liabilities, with analysis focused on pension deficits calculated using the same approach that firms adopt for their corporate accounts. The data underlying the survey is refreshed as companies report their year-end accounts.

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