DEFINED BENEFIT

U.K. corporate pension funding ends 2016 flat after deficit rises 15% in December

The total deficit of defined benefit funds covered by the London-based Pension Protection Fund's 7800 index increased 15% in December to £223.9 billion ($275 billion).

Deficits grew 15.1% over the year ended Dec. 31.

The funded level of these pension funds fell to 86.8% as of Dec. 31 from 88.1% as of Nov. 30, but remained steady vs. Dec. 31, 2015.

Assets increased 2.3% in December to £1.476 trillion, and increased 15.8% for the year ended Dec. 31. The FTSE All-Share index increased 4.9% over December and 12.5% over the year.

However, asset growth was more than offset by a 3.8% increase in liabilities for the month, to £1.7 trillion. Conventional 15-year gilt yields fell 17 basis points and index-linked 15-year gilt yields fell 13 basis points over the month of December, said the PPF in an update. The PPF uses the annualized yield on the FTSE U.K. gilts 15-year fixed-interest index, and the index-linked equivalent, for its analysis.

Over the year, liabilities grew 15.7%. The PPF said 15-year gilt yields were down 70 basis points, and index-linked 15-year gilt yields were down 91 basis points, over the same period.

Of the 4,339 pension funds covered by the index, 77.9% had deficits, up from 73.7% as of Nov. 30. As of Dec. 31, 2015, 76% of the 5,945 pension funds covered by the index had deficits.