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19 Nov 2012

DB Pension Schemes´ Deficit Narrows In October

Defined benefit (DB) pension schemes in the UK recorded a slight decline in their aggregate deficit to £227.3 billion at the end of October 2012, from the £229.1 billion a month earlier, data from the Pension Protection Fund showed last week.

Despite the slight improvement in the position of the 6,432 pension schemes in the PPF 7800 index, the deficit was bigger than the shortfall of £171.8 billion seen a year earlier.

The aggregate deficit of all pension schemes in deficit was £256.6 billion last month, compared with £258.2 billion at the end of September 2012 and £204.6 billion at the end of October 2011. Meanwhile, schemes in surplus saw their total surpluses edge up to £29.3 billion in October, from the £29.1 billion in September 2012, but the figure was down from the level in October 2011, when surpluses amounted to £32.9 billion.

There were 5,236 pension schemes in deficit at the end of last month, accounting for 81.4% of all schemes, which is down from the 5,248 at the end of September 2012, but up from the 5,084 a year earlier. The number of schemes in surplus was 1,196 in October, against 1,184 in September 2012 and 1,348 in October 2011.

Total scheme assets added up to £1,063.1 billion at the end of October, a decline of 0.2% on the month and a rise of 7.0% on the year. Total scheme liabilities eased 0.3% over October to £1,290.4 billion, but the figure was 10.7% higher than the level a year ago.

Schemes in the index saw their funding ratio, which represents assets as a percentage of s179 liabilities, rise to 82.3% last month from 82.4% in September 2012. In October 2011, the ratio was 85.3%.

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