The total surplus of corporate pension funds covered by the PPF 7800 index increased by 1.6% in November to £425.5 billion ($540.3 billion), despite a fall in the funding ratio of these plans.
The funding ratio was 145.7% as of Nov. 30, compared with 146.8% as of Oct. 31. The surplus grew by 14.5% over the year ended Nov. 30, while the funding ratio increased from 133.7%, the Pension Protection Fund, London, said in its monthly update.
Assets grew by 3.3% over the month, but were more than offset by a 4.1% increase in liabilities over the period. For the year, assets fell by 7.9% and liabilities dropped by 15.5%.
The higher surplus but lower funding ratio "is the result of more recent softer inflation data causing markets to price in an earlier start to policy rate cuts by global central banks, which led to a reduction in gilt yields and, consequently, a rise in liabilities by 4.1%, which was offset by a rise of 3.3% in total scheme assets," said Shalin Bhagwan, chief actuary and interim chief financial officer at the PPF, in the update.
