The funding level of the 5,588 corporate UK pensions plans in the Pension Protection Fund’s (PPF) 7800 Index rose to 95.1% at the end of April from 93.1% at the end March, as the aggregate deficit decreased during the month to £81.7 billion ($110.67 billion) from £115.6 billion.
Compared to April 2017, the funding level increased 5.6% from 89.5%, while the aggregate deficit more than halved from £179.8 billion.
Within the index, aggregate pension assets totaled £1.58 trillion at the end of April, which was a 0.7% increase from the previous month, and a 2.6% rise compared to the year-ago month. Meanwhile, total liabilities were £1.66 trillion at the end of April, a decline of 1.3% for the month, and 3.4% from the same time last year.
Aggregate liabilities of the pension in the index decreased 1.3% during the month to £1.66 trillion from £1.68 trillion at the end of March, and fell 3.5% over a year from £1.72 trillion at the end of April 2017.
Out of the 5,588 pension plans covered by the index, 3,637, or 65.1%, were in deficit at the end of April, compared to 3,796 plans in deficit at the end of March, or 67.9%; and 4,055 at the end of April 2017, which accounted for 72.6% of all plans. At the same time, the number of plans in surplus rose to 1,951, or 34.9% of all plans at the end of April, from 1,792, or 32.1%, at the end of March, and 1,533 in surplus, or 27.4%, at the end of April 2017.
Among the pension plans that were in deficit at the end of April, the aggregate deficit decreased to £194.9 billion from £217.6 billion at the end of March, and from £259.6 billion at the end of April 2017. Meanwhile, the total surplus of pension plans in surplus increased to £113.2 billion from £101.9 billion at the end of March, and £79.8 billion at the end of April 2017.
According to the PPF, conventional 15-year gilt yields increased 10 basis points, while index-linked 5-15 gilt yields rose by 2 basis points over the month. Assets increased by 0.7% in April, which was the result of higher equity prices, but offset by a decrease in bond prices. Over the previous 12 months, conventional 15-year gilt yields were up 19 basis points, index-linked 5-15 year gilt yields were up by 44 basis points, and the FTSE All-Share Index gained 4.2%. Equity markets and gilt yields are the main drivers of funding levels.