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DEFINED BENEFIT

U.K. corporate deficits rise 8.4% in April

The total deficit of defined benefit funds covered by the Pension Protection Fund's 7800 index grew 8.4% for the month and 30.2% for the year ended April 30 to £245.6 billion ($317.9 billion).

The funding ratio of these plans fell to 86% from 87% as of March 31 and 87.6% as of April 30, 2016.

Conventional 15-year gilt yields fell 2 basis points and index-linked 15-year gilt yields fell 10 basis points over the month of April. Over the year, 15-year gilt yields were down 57 basis points, and index-linked 15-year gilt yields fell 94 basis points. This translated into a 0.8% increase in liabilities in April and 15.6% for the year, to £1.76 trillion.

Lower equity prices in April, which saw the FTSE All-Share index fall 0.7%, affected pension fund assets. The PPF said total assets fell 0.3% over the month to £1.514 trillion. However, over the year, the FTSE All-Share index was up 15.8% and total assets grew 13.6%.

The proportion of pension funds in the index that were in deficit as of April 30 was 75.8%, up from 74.4% as of March 31. That compared with 75.6% as of April 30, 2016.