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 5,050 schemes in the PPF 7800 Index is estimated to have decreased over the month to £425.4 billion at the end of January 2024, from a surplus of £428.2 billion at the end of December 2023.
• The funding ratio increased from 142.8 per cent at the end of December 2023 to 143.9 per cent.
• Total assets were £1,395.2 billion and total liabilities were £969.8 billion.
• There were 599 schemes in deficit and 4,451 schemes in surplus.
• The deficit of the schemes in deficit at the end of January 2024 was £4.3 billion, up from £3.7 billion at the end of December 2023.
Shalin Bhagwan, PPF Chief Actuary said: “In the last month we've seen a slight fall in the estimated aggregate surplus of schemes in the DB universe - down £2.8 billion - to £425.4 billion and, on top of this, the deficit of schemes in deficit rose to £4.3 billion. Despite these downward trends, the funding ratio increased from 142.8 per cent at the end of December 2023 to 143.9 per cent.
The marginal changes to aggregate surplus and funding ratio somewhat mask the relatively large increase in bond yields over the month – this was driven by stronger-than-expected inflation data in the UK impacting the markets expectations about the pace of rate cuts by the Bank of England, as well as increased issuance from both governments and corporate borrowers. Volatile bond markets vindicate higher collateral buffers which, coupled with the ongoing private market denominator effect, appears to have added to the complexity of formulating an appropriate end-game plan and a corresponding investment strategy.”
View the February update and see the supporting data on the 7800 Index for 31 January 2024 here: The PPF 7800 index | Pension Protection Fund.
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