Pension Protection Fund chief executive Alan Rubenstein has said the PPF 7800 Index’s deficit is “far too high for comfort” but there is no “fundamental affordability issue for DB pensions”.

Speaking at the PMI’s annual conference in London, 11 May, Rubenstein noted that the Index’s deficit in 2009 crossed the £200bn mark for the first time. Eight years on, the PPF deficit for April 2017 was £245bn, which Rubenstein said was “far too high for comfort” but a “fraction” of the £400bn deficit that was reported in August 2016.

“We can talk about valuation basis, how far numbers are real but I think it’s important to understand that the PPF is there to stand behind that risk. We don’t expect all or indeed much of that shortfall to come to us, though clearly inevitably from time to time schemes do find themselves coming into the PPF.”

The pension protections that the PPF provides are back “centre stage”, Rubenstein said, due to how the landscape has changed over the last three years. “The world is changing dramatically…and you might think that that is enough excitement for a whole working lifetime rather than just one valuation cycle.”

Despite the current climate, Rubenstein does not believe that there is a “fundamental affordability issue with the DB system” and the “picture is not as bleak as some suggest”. He said that overtime scheme funding should improve and “the best protection for members is a healthy employer standing behind the scheme and willing and able to fund it”.

However, he added that he is not pretending there is not an issue with a “minority of stressed schemes”. “There clearly is and we should not underestimate what that distress means for members for as well as the corporate. We have to make sure we don’t lose sight of the bigger picture. There are clearly ways that we can improve the system…but the PPF stands ready to play its part”.

Furthermore, Rubenstein encouraged delegates at the conference to respond to the lifeboat fund’s consultation on its proposals for new levy rules. He said the PPF has spent a great deal of time reviewing the framework and listening to feedback.

“We believe the current levy model works pretty well, the data says that, the feedback says that but it doesn’t mean that we can’t do better and where we can, we’re looking to do so.” The full consultation document can be found here and it will close at 5pm on Monday 15 May 2017.

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