Pensions - Articles - Fully hedged schemes lose ground in February

 The Broadstone Sirius Index – a monitor of how various pension scheme strategies are performing on their journeys to self-sufficiency – posts its latest update.

 The Broadstone Sirius Index finds that the fully hedged scheme lost ground in February with its funding level falling by 0.6 percentage points from 68.4% to 67.8% as a consequence of gilt yields rising around 0.1% during the month.

 The half hedged scheme’s funding level remained almost constant, rising only 0.1 percentage points from 97.0% to 97.1% during February 2024.

 Both of the deficits ended February at broadly the same level at which they entered it: £9.1m for the hedged scheme and £0.8m for the half hedged scheme.

 Chris Rice, Head of Trustee Services at Broadstone, commented: "Continued funding stability in February and over the last year, has allowed trustees and employers to digest recent announcements of new funding regulations, options around surpluses, buy-out and consolidation as well as the Regulator’s General Code.

 “There will be much for employers and trustees to do to make the most of recent and forthcoming changes, as well as complying with new regulations and guidance.

 “The issues faced by individual schemes will be significantly different, as illustrated by the diverging fortunes of our tracked schemes. While some will be discussing surplus, run on, consolidation or buy-out, others will be concerned as to how the employer will afford the new funding requirements.

 “In both cases it is essential that trustees and employers engage with their advisers to fix the roof while the sun shines and make progress in stable funding times.”