Aggregate DB pension surplus more than doubles in March

The combined surplus of UK defined benefit (DB) pension schemes in the Pension Protection Fund (PPF) 7800 index is estimated to have more than doubled to £34.2bn in March.

The index rose from its previous month’s reading of £14.6bn as total assets rose from £1,740.2bn to £1,757.3bn and total liabilities edged down from £1,725.6bn to £1,723.1bn.

The schemes’ funding ratio also increased from 100.8 per cent at the end of February 2021 to 102.0 per cent.

At the end of March, there were 2,730 schemes in deficit and 2,588 schemes in surplus, while the deficit of the schemes in deficit was £144.3bn, down from £154.4bn at the end of February.

The number of schemes in deficit at the end of March decreased to 2,730 from 2,839 the month before, with the new reading representing 51.3 per cent of the total 5,318 DB schemes.

Comparatively, March 2021 saw the total surplus of schemes in surplus rising to £178.5bn from £169.0bn at the end of February, while the number of schemes in surplus rose by 109 to 2,588 in March.

PPF chief finance officer and chief actuary, Lisa McCrory, said: “The funding position of the PPF 7800 Index has improved slightly in March.

"The aggregate surplus of the 5,318 DB pension schemes increased to £34.2bn with an improved funding ratio of 102 per cent primarily due to an increase in equities.”

The data also showed a vast improvement over the past 12 months, with March 2020 index data having shown a total deficit of £90.7bn and a funding ratio of 94.9 per cent.

There were also just 1,947 DB schemes in surplus in March 2020, only 36.6 per cent of all schemes on the index.

The index's last update in February had seen it register a surplus for the first time in almost two years, as the index's schemes registered a surplus of £14.6bn at the end of February, flipping from a deficit of £65bn one month prior.

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