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.
Note on 7800 methodology
This update has been produced using our standard methodology, which is summarised in Note 4 on page 8 of this document. In particular, while the approach will capture the liability impacts of government bond yield movements, the impact on assets will often be less accurate. This is because we do not hold sufficient data to capture the impact of any structural changes to asset allocations nor to accurately capture changes in any leveraged LDI portfolios.
Highlights
• The aggregate surplus of the 5,131 schemes in the PPF 7800 Index is estimated to have increased over the month to £376.7 billion at the end of December 2022, from a surplus of £371.5 billion at the end of November 2022.
• The funding ratio increased from 133.7 per cent at the end of November 2022 to 136.5 per cent.
• Total assets were £1,409.5 billion and total liabilities were £1,032.8 billion.
• There were 686 schemes in deficit and 4,445 schemes in surplus.
• The deficit of the schemes in deficit at the end of December 2022 was £4.5 billion, down from £5.8 billion at the end of November 2022.
Lisa McCrory, PPF Chief Finance Officer and Chief Actuary said: “The primary driver of the increase in estimated surplus was the rise in government bond yields through December, which meant that the estimated value of liabilities fell by £68.5 billion. Bond yields rose in December as central banks, particularly in the US and Eurozone, re-iterated that policy rates are likely to remain at higher levels for some time. In addition, the Bank of England sold £15 billion of the holdings that they had bought in the market intervention in September/October, representing a material increase in supply.”
View the January update and see the supporting data on the 7800 Index for 31 December 2022 here
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