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Funding for db schemes plummets by £162bn says PPF

Defined benefit pension scheme funding has plummeted by more than £162bn in the past 12 months according to the Pension Protection Fund’s latest index.

The pension lifeboat’s figures show funding for final salary schemes is in a dire state with the aggregate funding position of almost 7,800 defined benefit pension funds £136bn in the red at the end of November. The figure has slid more than £38bn since the end of October.

The PFF attributes the mounting shortfalls to the turbulence in the market. In the index it states: “Over the past year, the falling equity markets and bond yields have led to an overall worsening of the funding position. Lower bond yields resulted in a 4.0 per cent increase in aggregate liabilities, while weaker equities have reduced assets by 18.7 per cent.”

The total deficit of schemes in the red last month is estimated to have worsened to £155bn from £122.1bn at the end of October, according to the PPF. In November 2007, the aggregate deficit of all schemes in deficit stood at £58.3bn.

This November, the total surpluses of schemes in surplus fell to £19bn from £24.7bn at the end of October. While the November 2007 figure stood at £84.4bn.

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