UK - The aggregate funding position of almost 7,800 defined benefit (DB) schemes has improved from a deficit in March to a surplus of £30.3bn (€38.3bn) at the end of April, the Pension Protection Fund (PPF) has revealed.
Latest figures from the PPF 7800 Index revealed there was a significant change to the funding position of pension schemes in April, as DB schemes moved from an aggregate deficit of £23.6bn to a surplus of £30.3bn - a shift of £56.9bn.
The PPF attributes the first estimated surplus in four months to a 3.9% increase in assets during April, following improvement in the equity markets.
However, the organisation pointed out on a year-on-year basis scheme funding for the DB schemes has worsened, falling £58bn from a surplus of £88.3bn in April 2007.
That said, the figures also showed the total deficit of pension schemes in deficit had improved to £55.5bn from £81.3bn at the end of March, while the total surpluses of pension schemes in surplus increased to £85.9bn, from £57.7bn at the end of March.
The number of schemes in deficit in April 2008 also fell during the month to 5,271, equivalent to 68% of the DB scheme sample, which is the lowest level since October 2007, while the number of schemes in surplus increased to 2,473, or 32%.
In addition, the research showed the total scheme assets increased 3.4% to £851.3bn during the month, a rise of 2.8% over the three months to April, while the scheme liabilities are down 3% over the last month, but have increased 7.5% on a year-on-year basis.
The PPF highlighted the improvement in the equity markets over April could have helped bring the aggregate funding position back into surplus, as the FTSE All-Share Index increased 3.2%.
Figures also revealed the funding position may also have been helped by the change in 10-year gilt yields, which increased by 26 basis points in April to a yield of 4.8%, which in turn caused a fall in scheme liabilities of approximately 3.4%.
However, the research suggested the overall funding position has worsened in the last year because the negative impact of equities on scheme assets combined with falling bond yields led to an 8.2% increase in aggregate liabilities and a 2% reduction in assets.
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