The aggregate surplus of U.K. defined benefit funds covered by the PPF 7800 index increased 13.8% in May to £430.9 billion ($533.8 billion).
The surplus increased by 58.6% for the year ended May 31, according to a Tuesday update by the Pension Protection Fund, London. The PPF is the lifeboat fund for pension funds of insolvent U.K. companies.
The aggregate funding ratio was 145.1% as of May 31, compared with 136.1% as of April 30. The funding ratio was 120.7% as of May 31, 2022.
Assets decreased by 2.9% for the month and fell 12.7% for the year to £1.39 trillion. Liabilities declined 8.9% for the month and 27.4% for the year, to £954.3 billion.
Five-to-15-year index-linked gilt yields were up 47 basis points in May and increased by 244 basis points over the year.
The majority of the 5,131 pension funds covered by the index were in surplus as of May 31, at 90.5%, up from 86.6% a month earlier. As of May 31, 2022, 73.8% of pension funds in the index were in surplus.
"U.K. government bond yields rose sharply during May, catalyzed by the release of the U.K. inflation data which saw annual inflation falling, but more slowly than anticipated. This has led to predictions that the Bank of England will have to make further increases to the policy rate to combat inflation and return it to the 2% target," Lisa McCrory, chief finance officer and chief actuary at the PPF said in a news release accompanying the data.
