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Pension Funds

PPF 7800 index funding deficit more than doubles in October

The total deficit of all U.K. corporate pension funds covered by the Pension Protection Fund's 7800 index increased 178.3% in October and 22.8% for the year ended Oct. 31, to 107.7 billion ($137.4 billion).

An update by the PPF said the funding level of these plans fell to 93.6% as of Oct. 31, vs. 97.7% as of Sept. 30 and 94.7% as of Oct. 31, 2017.

Assets fell 1.6% in October but grew 1.7% vs. figures from a year ago to 1.588 trillion. The FTSE All-Share index was down 5.2% for the year, while the FTSE All-World index fell 2.5% for the year.

Liabilities worsened over the month and year, by 2.6% and 2.8%, respectively. The update said conventional 10- and 15-year gilt yields fell by 13 basis points and 9 basis points each; while index-linked five-to-15-year gilt yields fell by 19 basis points in October.

For the year, conventional 10-, 15- and 20-year gilt yields were up 5 basis points, down 4 basis points, and down 7 basis points, respectively. Index-linked five- to 15-year gilt yields were down 3 basis points for the year.

The proportion of pension funds in deficit increased to 67.2% as of Oct. 31, vs. 61.5% as of Sept. 30 and 65.4% as of Oct. 31, 2017.