The total surplus of U.K. defined benefit funds covered by the Pension Protection Fund’s 7800 index increased 4.7% in June to £99 billion ($137 billion).
The surplus was £94.6 billion at the end of May.
A year earlier, U.K. corporate DB funds recorded a total deficit of £132.2 billion, the London-based PPF said Tuesday in an update. The PPF is the lifeboat fund for defined benefit plans of insolvent U.K. companies.
The funding ratio increased to 105.8% as of June 30, up from 105.6% as of May 31. The funding ratio was 93.1% as of June 30, 2020, the update said.
As of June 30, 45.6% of the 5,318 pension funds covered by the index were in deficit with a total £117.7 billion, compared with 46% and £117.8 billion as of May 31. As of June 30, 2020, 63.8% of pension funds were in deficit with a total £261.5 billion.
Assets were up 1.4% during the month and rose 1.2% for the year ended June 30 to £1.81 trillion.
Liabilities increased 1.2% over the month and declined 10.9% for the year to £1.71 trillion.
The FTSE All-Share index was up 0.2% for the month and gained 21.5% for the year ended June 30, the PPF said.
Five- to 15-year index-linked gilt yields declined 5 basis points in June but increased 23 basis point over the year.
“It is reassuring to see the continued growth in pension scheme funding ratios, with a 0.2% rise over June,” said Sion Cole, head of U.K. fiduciary business at BlackRock, in an emailed comment. “This continued steady momentum is an indicator that markets have stabilized following last year’s volatility and that pension schemes continue to bolster their funding levels.”
