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Markets feed further DB surplus growth – PPF

UK - The UK's defined benefit pension funds had a collective surplus of around £53bn (€75bn) surplus at the end of October, the most recent index published by the Pension Protection Fund (PPF) has revealed.

Looking at data from 7,800 UK-based defined benefit funds, the PPF found rising bond yields and equity markets have catapulted the funds into a considerable surplus from an aggregated deficit of £28bn at the same time last year.

The funds' surplus has also increased by £9bn from end-September 2007 according to the PPF index.

Schemes in deficit are thought to have improved their funding positions by £34bn compared with a deficit of £48bn over the last year.

Those in surplus have now almost doubled their overfunding positions from £54bn to £101bn.

The PPF estimates "aggregate scheme assets rose by around 9.6% in the past year" because of improved equity market conditions. Those also offset the slightly negative effect higher gilt yields had on assets.

Higher bond yields lowered aggregate liabilities by around 5.7%  over the past year, the UK's pension rescue fund noted.

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