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Employee Benefits News

Latest News
20 Aug 2012

UK Final Salary Pensions Deficit Grows In July

The aggregate deficit of the schemes in the Pension Protection Fund's (PPF) 7800 index grew to £283.0 billion at the end of last month from £267.0 billion in June, according to data released last week.

The figure also marked a significant increase from the level at the end of July 2011 when the deficit stood at £78.0 billion. In addition, the funding ratio of schemes - representing the schemes' assets as a percentage of s179 liabilities - eased to 78.9% at the end of last month from 79.6% a month earlier and 92.7% a year ago.

The aggregate deficit of all schemes in deficit at end-July rose to £306.5 billion against £291.3 billion the previous month and £129.6 billion at end-July 2011. The number of schemes in deficit was 5,418 at the end of July, representing 84.2% of the total 6,432 defined benefit schemes in the index. At the end of June there were 5,388 schemes in deficit.

Meanwhile, the total surpluses of schemes in surplus fell to £23.5 billion last month from £24.2 billion in June and £51.6 billion last year. There were 1,014 schemes in surplus last month, or 15.8% of all schemes, against 1,044 in June.

Total scheme assets within the index were estimated at £1.0575 trillion at end-July, increasing 1.6% over the month and 6.9% over the year. The month-on-month rise reflected an improvement in equity markets and higher gilt prices. Total scheme liabilities added up to £1.3405 trillion last month, a rise of 2.5% from the previous month, due to a decline in gilt yields and higher gilt prices. The year-on-year increase was 25.6%.

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