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Pensions Funds

U.K. pension plans see significant funding improvement in June

The total deficit of defined benefit funds covered by the Pension Protection Fund's 7800 index fell 19.8% for the month and 38.9% for the year ended June 30, to 186.2 billion ($241.5 billion).

The PPF said in an update Tuesday the funding level grew to 89.1% as of June 30, up from 86.8% as of May 31 and 82.3% as of June 30, 2016.

Assets fell 1.2% to 1.515 trillion in June, which the PPF said reflected the impact of lower U.K. equity prices. The FTSE All-Share index fell 2.8% over the month.

For the year, the FTSE All-Share index was up 13.8% and assets of the funds covered by the index also rose by 6.6%.

Liabilities fell 3.7% in June to total 1.7 trillion. Conventional 15-year gilt yields rose 20 basis points and index-linked five-to-15 year gilt yields rose 19 basis points in the same period. For the year ended June 30, 15-year gilt yields grew 21 basis points, while index-linked five-to-15 year gilt yields were down 33 basis points. Pension funds' liabilities fell 1.4% over the year.

The proportion of the 5,794 pension funds in the index that were in deficit as of June 30 fell to 72.2% from 74.4% as of May 31 and 80.9% as of June 30, 2016.