Pensions - Articles - DB pension surpluses continue to rise to near record levels


XPS Pensions Group estimates that the aggregate surplus of UK pension schemes on long-term targets remains extremely positive at approximately £154bn.

 A rise in long-term gilt yields of ~0.2% led to a decrease in the value of liabilities, increasing scheme funding levels.

 This rise was partially offset by aggregate scheme assets decreasing over February 2024, driven by schemes’ hedging strategies.

 Over February 2024, UK pension schemes’ funding positions improved by c.£20bn against long-term funding targets, new XPS Pensions Group research shows. Based on assets of £1,420bn and liabilities of £1,266bn, the aggregate funding level of UK pension schemes on a long-term target basis remains extremely positive, at 112% of the long-term value of liabilities, as of 28 February 2024.

 

 The update comes as the Government has this month released a consultation on models for allowing access to surpluses. The consultation outlines various possible ways trustees and sponsors could use surpluses to the benefit of members and sponsors, while also supporting the Government’s aim of schemes investing in productive assets.

 Danny Vassiliades, Partner at XPS Pensions Group said: “The fact that aggregate pension scheme surpluses increased last month and are at near-record levels* underlines the timeliness of the Government’s consultation on models for surplus utilisation, first hinted at in the Chancellor’s 2023 Autumn Statement.

 Any role played by DB schemes in support of wider UK growth must not risk the hard-won security of members’ benefits. However, with many schemes are now showing considerable surpluses and with the Government moving forward with its proposals, trustees and sponsors may wish to review their ultimate objectives in this context.”

 * Source: XPS DB:UK, record levels October 2023.
  

Back to Index


Similar News to this Story

Wish list for the occupational pensions industry in 2025
As one year closes and another begins, it's an opportune moment to set our sights on the future. The UK occupational pensions industry faces nume
PSIG announces outcome of Consultation
The Pensions Scams Industry Group (PSIG), which was established in 2014 to help protect pension scheme members from scams, today announced the feedbac
Transfer values fell to a 12 month low during November
XPS Group’s Transfer Value Index reached a 12-month low, dropping to £151,000 during November 2024 before then recovering to its previous month-end po

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.