The total surplus of U.K. defined benefit funds covered by the Pension Protection Fund's 7800 index increased to £83.2 billion ($114.5 billion) at the end of August, up from £62.4 billion in July, according to a release Tuesday.
The London-based PPF, the lifeboat fund for defined benefit plans of insolvent U.K. companies, publishes the monthly index of the estimated funding position for all eligible defined benefit funds.
The funding ratio for the 5,318 pension funds in the PPF 7800 index increased to 104.7% from 103.5% in the previous month.
Total assets of £1.86 trillion were up 0.4% from the end of July and 5.2% from a year earlier. Total liabilities of £1.77 trillion were down 9.8% from the previous month and 5% over the year.
Of the 5,318 pension funds in the index, 2,483 were in deficit and 2,835 in surplus. There were 117 fewer pension funds in deficit in August. The aggregate deficit of underfunded pension funds at the end of August 2021 was £130.2 billion, down from £142.2 billion in July.
One year ago, the funding ratio of the 5,422 schemes in the index at the time was 92.6% and the aggregate deficit was £140.5 billion.
Lisa McCrory, PPF chief finance officer and chief actuary, said in the release that the improvement in the aggregate funding position in 2021 was caused by a rise in bond yields coupled with an increase in the value of equities.
