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Pension Funds

Funding for pension plans in PPF’s 7800 index improves in September

The total deficit of defined benefit funds covered by the London-based Pension Protection Fund's 7800 index fell 28.3% in September to £158 billion ($211.6 billion).

For the 12 months ended Sept. 30, deficits fell 57.7%.

The funding ratio of these plans improved to 90.6% as of Sept. 30, up from 87.6% as of Aug. 31, and 79.8% as of Sept. 30, 2016.

Assets fell 1.8% in September to £1.524 trillion, which the PPF said in an update reflected the impact of lower bond and global equity prices. For the year ended Sept. 30, assets grew 3.4%, and the FTSE All-Share index was up 8.4%.

Liabilities fell 5.1% for the month and 9% for the 12-month period, to £1.682 trillion. For the month, conventional 15-year gilt yields rose 25 basis points, and index-linked five- to 15-year gilt yields grew 31 basis points. Over the year ended Sept. 30, 15-year gilt yields were up 55 basis points, and index-linked five- to 15-year gilt yields were up 28 basis points, the PPF said.

The proportion of pension funds with a deficit fell to 70.4% as of Sept. 30, from 73.5% as of Aug. 31, and 82.7% as of Sept. 30, 2016.