The Pensions Regulator (TPR) and the Pension Protection Fund (PPF) today published the seventh version of the Purple Book, which monitors the risks faced by predominantly private sector DB schemes in the UK.

Some of the main conclusions include the deterioration of scheme funding on a s179 basis in the year to 31 March 2012, with funding levels falling from 100 per cent to 83 per cent; the ongoing decline of the number of schemes open to new members and new accruals; and the continuing increase of assets allocated to bonds and alternative investments.

The PPF said movements in the risks faced by DB schemes can have an impact on the fund’s aim to be financially self-sufficient by 2030 and its executive director for financial risk Martin Clarke said that, while the PPF remains on track to meet its funding aims, the Purple Book showed it needs to keep a close eye on the continuing global financial crisis.

The regulator’s chief executive Bill Galvin added: "We appreciate that the current economic situation presents a continuing challenge to trustees - low interest rates and low gilt yields have contributed to increased liabilities and deficits for many DB schemes.

“However, rising deficits do not necessarily result in higher contributions for sponsors. The UK regime offers flexibility, including the option to increase recovery plan lengths or provide non-cash guarantees."

Share Story: