UK pension funds narrow deficit in April – PPF

The combined deficit of 7,400 UK final salary pension schemes narrowed to 188.5 billion pounds ($286 billion) in April on the back of rising equity markets and gilt yields, data from the Pension Protection Fund showed.

The combined deficit narrowed from 242 billion pounds at end-March as buoyant stock markets boosted pension scheme assets by 4 percent and higher gilt yields reduced liabilities by 3.2 percent, the PPF said in its monthly survey of UK schemes.

Total scheme assets rose 3.2 percent to 772.3 billion pounds during the month, adding to a 3.5 percent increase in March which took assets to 748.2 billion pounds, the data showed.

By the end of April 6,429 schemes were in deficit, or 87 percent of the total, compared with 6,637 at the end of March while 953 schemes were in surplus, up from 774.

At the same time last year, 2,596 schemes were in surplus and 4,815 were in deficit.

The number of final salary schemes covered by the PPF's monthly survey has fallen to 7,400 from about 7,800 a year ago as a result of scheme mergers, insurance buyouts, and schemes transferring into the PPF due to sponsor insolvency.

Pension scheme assets have risen 3.7 percent in the quarter to end-April but are down 9.8 percent over the past year as a result of falling share prices and lower bond yields.

Lower bond yields have pushed up aggregate liabilities by 10.4 percent while falling equity prices have reduced assets by 11.9 percent.