The aggregate surplus of U.K. defined benefit funds covered by the PPF 7800 index increased 5.4% in April to £378.6 billion ($475.7 billion).
The surplus increased by 70.6% for the year ended April 30, from £221.9 billion, 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 136.1% as of April 30, compared with 133.2% as of March 31. The funding ratio was 115.8% as of April 30, 2022.
Assets decreased by 1% for the month and fell 12% for the year to £1.43 trillion. Liabilities declined 3% for the month and 25% for the year, to £1.05 trillion.
Five-to-15-year index-linked gilt yields were up 36 basis points in April and increased by 263 basis points over the year, which contributed to falls in liability values.
The majority of the 5,131 pension funds covered by the index were in surplus as of April 30, at 86.5%, up from 84.8% a month earlier. As of April 30, 2022, 68% of pension funds in the index were in surplus.
"In April, with the dust settling on the turmoil that impacted the banking sector in the previous month, we saw government bond yields rise and markets turning their focus back to sticky inflation," Lisa McCrory, chief finance officer and chief actuary, said in a news release accompanying the update.
"As yields rose, the value of scheme liabilities fell while, due to schemes in aggregate being underhedged to interest rates, the estimated value of scheme assets fell more slowly — ultimately resulting in an improved funding ratio and aggregate surplus," she added.
