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Pension Funds

PPF’s 7800 index drops back into pension funding deficit in December

U.K. defined benefit funds covered by the Pension Protection Fund's 7800 index fell back into deficit in December, at 31.9 billion ($40.5 billion), from a 14.3 billion surplus.

For the year, however, deficits improved 69.3%, although the London-based PPF had updated its calculations in November to reflect a new data set and actuarial assumptions.

The funding level worsened to 98% as of Dec. 31, vs. 100.9% as of Nov. 30. As of Dec. 31, 2017, the funding level was 93.9%.

Assets fell over the month and the year, by 0.6% and 1.1% respectively, to 1.571 trillion. For the month, liabilities increased 2.4% but fell 5.3% for the year, to 1.6 trillion.

The PPF said in an update that the FTSE All-Share index fell 3.7% for the month and dropped 9.5% for the year. Five- to 15-year index-linked gilt yields fell 4 basis points in December, and fell 13 basis points over the year.

As of Dec. 31, 60% of the 5,450 pension funds covered by the index were in deficit, up from 55.2% as of Nov. 30. As of Dec. 31, 2017, 66.4% of the 5,588 pension funds covered by the index were in deficit.