A scheme’s s179 liabilities represent, broadly speaking, the premium that would have to be paid to an insurance company to take on the payment of PPF levels of compensation. This compensation may be lower than full scheme benefits.
Highlights
• The aggregate surplus of the 5,215 schemes in the PPF 7800 Index is estimated to have increased over the month to £374.5 billion at the end of September 2022, from a surplus of £313.8 billion
at the end of August 2022.
• The funding ratio increased from 125.1 per cent at the end of August 2022 to 134.8 per cent at end September.
• Total assets were £1,450.5 billion and total liabilities were £1,076.0 billion.
• There were 746 schemes in deficit and 4,469 schemes in surplus.
• The aggregate deficit of the schemes in deficit at the end of September 2022 was £5.3 billion, down from £14.3 billion at the end of August 2022.
Lisa McCrory, PPF Chief Finance Officer and Chief Actuary said: “ Last month was likely to have been very challenging for many DB schemes operationally. However, we expect that the impact of rising gilt yields will have had a positive impact on scheme funding, and that over 80 per cent of schemes are now fully funded on our s179 basis with a combined deficit of just over£5bn, down from £14bn at the end of August.
We anticipate that many schemes will have seen a change in their hedging positions. Whilst DB liabilities have fallen, a high interest and inflation environment could put further pressure of some employers. It is important that trustees understand how their funding and risk profile has changed and have contingency plans in place.”
View the October update and see the supporting data on the 7800 Index for 30 September 2022 here
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