The aggregate surplus of 4,969 schemes in the PPF 7800 Index is estimated to have increased slightly to £235.5 billion at the end of November 2024, from a surplus of £234.0 billion at the end of October 2024.
This is the first update since the PPF changed how it calculates assets and liabilities. According to Broadstone, the funding of the DB pension system has improved significantly even if the revision reduced the expected overall financial position.
Broadstone actuarial director Sarah Elwine says: “December’s figures are the first PPF 7800 to be released under its new methodology which significantly reduced the funding level of Defined Benefit pension schemes when first revealed in the publication of the Purple Book. While the change in methodology and consequent drop in overall funding levels may be of interest to policymakers, it should not unduly concern individual trustees or sponsors.
“The long-term trends remain constant with a drastic improvement in funding for many pension schemes which has turbocharged the de-risking market. Schemes remain in a healthy position and following another strong year for de-risking in 2024, we would anticipate the continuation of this as demand for insurance solutions remains high. New entrants have joined the market and trustees enjoy a growing number of end-game options.
“As we head towards the end of the year, trustees and sponsors should prioritise the same long-term objectives so they can decide on the best end game option for them. This includes managing funding and investment risk to reduce volatility, ensuring good quality administration to keep members secure and happy as well as appointing advisers that provide value for money.”
