UK corporate pension funds increase surplus in August

The total surplus of UK defined benefit funds covered by the Pension Protection Fund’s 7800 index rose to £ 83.2 billion ($ 114.5 billion) at the end of August, from £ 62.4 billion in July, according to a statement released Tuesday.

The London-based PPF, the rescue fund for defined benefit schemes of insolvent UK companies, publishes the monthly index of estimated funding position for all qualifying defined benefit funds.

The funding rate of the 5,318 pension funds in the PPF 7800 index increased to 104.7%, compared to 103.5% the previous month.

Total assets of £ 1.86 trillion were up 0.4% from the end of July and up 5.2% from a year earlier. Total liabilities of £ 1.77 trillion were down 9.8% from the previous month and 5% on the year.

Of the 5,318 index pension funds, 2,483 were in deficit and 2,835 in surplus. There were 117 fewer deficit pension funds in August. The overall deficit of underfunded pension funds at the end of August 2021 was £ 130.2 billion, up from £ 142.2 billion in July.

A year ago, the funding ratio of the 5,422 index plans at the time was 92.6% and the overall deficit was £ 140.5 billion.

Lisa McCrory, chief financial officer and chief actuary of PPF, said in the statement that the improvement in the overall funding position in 2021 was due to rising bond yields coupled with an increase in stock values.