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 £313.8 billion at the end of August 2022, from a surplus of £254.3 billion at the end of July 2022.
• The funding ratio increased from 118.2 per cent at the end of July 2022 to 125.1 per cent.
• Total assets were £1,565.0 billion and total liabilities were £1,251.2 billion.
• There were 1,134 schemes in deficit and 4,081 schemes in surplus.
• The aggregate deficit of the schemes in deficit at the end of August 2022 was £14.3 billion, down from £29.8 billion at the end of July 2022.
Lisa McCrory, PPF Chief Finance Officer and Chief Actuary said: “The unprecedented rise in bond yields last month saw the funding position for the 5,215 schemes under our protection increase by £59.5bn to £313.8bn. This was mainly a result of the Bank of England’s forceful approach to tackling inflation, their plans to sell off gilt holdings, and expectations that the new Prime Minister’s programme of tax cuts and energy market intervention will cause a material increase in the UK’s borrowing. We’ve not seen an increase in bond yields like this since January 2009, and the overall increase since November 2021 has more than doubled the largest previous increase in yields since the Bank of England gained independence in 1998.
“While the near-term economic outlook is highly uncertain, the PPF remains in a strong financial position and is well positioned to weather this period of uncertainty irrespective of how scheme funding and insolvency rates evolve in the future.”
View the September update and see the supporting data on the 7800 Index for 31 August 2022 here: The PPF 7800 index | Pension Protection Fund
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