UK - The Pension Protection Fund's (PPF) 7800 Index has reported a second consecutive month of increases to record an aggregate surplus of £53.4bn (€67.1bn) at the end of May.

Latest figures from the monthly index show the aggregate funding position of almost 7,744 schemes increased by £20.1bn, from £30.3bn at the end of April to £53.4bn, although this is still significantly lower than the £126.1bn surplus recorded in May 2007.

Data revealed the total deficit of schemes in deficit in May 2008 has fallen from £55.5bn in the previous month to £45.7bn, although this is twice as high as the £23.8bn deficit reported at the same period in 2007.

That said, the number of schemes in deficit in the last month dropped from 5,271 in Paril to 4,991, which at 64% of the total DB schemes in the sample is the lowest level since October 2007.

Meanwhile, the PPF figures revealed the number of schemes in surplus increased to 2,753, which resulted in an aggregate surplus of £99bn, compared to £85.9bn in April, albeit the Index highlighted this surplus of schemes in surplus is still around £50bn lower than the £149.9bn surplus reported in May 2007.

The Index showed the value of total scheme assets increased by 0.1% over the month to £851.8bn, which equates to an increase of 2.6% over the three months to May 2008, but a loss of 2% over the past 12 months.

In addition, the total value of scheme liabilities fell 2.7% in May to £798.5bn, although this is an increase of 7.5% from May 2007, as the PPF pointed out while lower bond prices had offset the 0.5% increase in assets resulting from the outperformance of global equities, higher gilt yields helped reduce scheme liabilities by 3.2%.

That said, the PPF Index pointed out "over the past year, the negative impact of equities on scheme assets combined with falling bond yields have led to an overall worsening of the funding position, with lower bond yields resulting in a 8% increase in aggregate liabilities, while weaker equities have reduced assets by 3.6%".

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