UK – Funding levels within the UK’s defined benefit schemes have risen to their highest level since November 2011, according to the latest figures from the Pension Protection Fund.

Publishing the latest PPF 7800 index, the lifeboat scheme said the aggregate deficit had fallen by £33.5bn (€39.4bn) over the course of January, increasing funding to 83.7%.

The funding level is the highest reported since November 2011, when it stood at 86.3%, and compares favourably with the 2012 peak of 83.4% at the end of March.

Funding is also significantly improved year-on-year, at which point the level had dipped below 80% with comparable liabilities.

However, the increased funding level was not solely down to a £19bn increase in aggregate assets, but also due to a reduction in liabilities – down by nearly £15bn from more than £1.3trn.

The PPF said the 1.8% growth in assets was due to a “significant” boost in equity market returns – a 6.3% increase in the value of the FTSE All-Share index over the end of December. 

Meanwhile, the Department for Work & Pensions (DWP) confirmed it would consult on changes to legislation governing auto-enrolment.

The forthcoming consultation, planned for next month, will allow employers and members of the pension industry to comment on a number of potential improvements, including the removal of any duty to enrol workers who have already exceeded the UK’s lifetime pensions allowance, set to fall to £1.25m.

Members who have already accrued more than the incoming limit will be allowed to retain the current £1.5m threshold if they cease contributing by next April.

Pensions minister Steve Webb said the department did not want to take legislative changes lightly, but that it was important to guarantee automatic enrolment was working.

“We’ve been listening to the experience of employers that have enrolled their workforce so far and recognise that some parts of the process could be improved,” he said.  

“By consulting on these changes, we can address this before automatic enrolment is rolled out to small and medium-sized businesses.”

The looming staging dates for smaller employers, starting in April next year, are also one of the reasons the work and pensions parliamentary select committee has called for the restrictions on the National Employment Savings Trust to be lifted immediately, noting that most employers need up to 18 months to prepare for auto-enrolment.

The DWP said the consultation would also explore ways of allowing money purchase schemes to meet auto-enrolment quality requirements.