Connected Research

Union policy research in the 21st century

PPF7800 Index – end-November update

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It’s second Tuesday – so the Pensions Protection Fund has updated its index of the financial health of the country’s 7,400 defined benefit pension schemes.

The aggregate position is that schemes are in deficit to the tune of £92.5bn – though this represents an improvement of £5.1bn on the month and of £31.4bn on the position one year ago. Some 78.9% of schemes are currently in deficit on the calculations used by the PPF – again, an improvement on the 79.5% recorded last month and a considerable advance on the 91% recorded when the position was at its recent worst in February 2009.

The improving position during November is a result of assets rising by a faster rate than liabilities due to rising stock markets – the same explanation is true for the relative position over the last year, with assets rising 15.2% to a total of £863.2bn, compared to a 9.4% rise in scheme liabilities to a total of £955.7bn.

The improvements are welcome, but the figures continue to demonstrate the volatility of pensions scheme funding – aside of the statistical adjustments made in the calculations. The same continues to be true for decisions made in the current environment about the future of individual schemes. In the meantime, the NAPF suggestion for Pre-Budget Report assistance to pension schemes made in its annual survey (see below) remains a valid one: it would see further positive changes in the value of scheme liabilities which would ease the substantial pressure which remains on schemes in practice.

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Written by Calvin

08/12/2009 at 5:01 pm

Posted in Pensions

Tagged with , ,

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