The aggregate surplus of the 5,050 schemes within the PPF 7800 Index experienced a slight dip as of January 2024, totalling £425.4 billion, down from £428.2 billion at the end of December 2023.
Among these schemes, 599 were in deficit, while 4,451 were in surplus. Additionally, the funding ratio rose from 142.8 per cent at the close of December 2023 to 143.9 per cent by the end of January 2024.
Broadstone senior actuarial director Jaime Norman says: “The PPF 7800 recorded a very minor deterioration through January but the big picture of pension schemes holding on to hefty funding improvements remained consistent in the first month of the year.
“As a result, we are expecting another record year of de-risking in 2024 as schemes look to capitalise on the attractive funding position they have entered over the past couple of years. Meanwhile, insurers have moved quickly to ramp up capacity so they are able to meet this expected demand in what remains a competitive market.
“Despite this increased ability to meet de-risking demand, schemes still need to sure they have best-in-class administration, excellent data and meticulous preparation before approaching the market.”
Standard Life business development actuary Charlotte Fletcher says: “Funding positions for UK defined benefit pension schemes grew slightly in January, having seen a slight fall at the end of 2023. The aggregate section 179 funding ratio for the 5,050 schemes in the PPF 7800 Index now stands at 143.9 at the end of January 2024, compared to 142.8 per cent at the end of December 2023*.
“With funding positions for UK DB schemes improving slightly over the past month, there continues to be every indication that 2024 will be another busy year for the market. Since January 2023, the aggregate surplus has increased from £374.4bn to £425.4bn. In this market environment, trustees and sponsors will likely be looking towards the Budget next month, when changes that impact schemes may be announced. However, looking ahead to the next few months, activity levels are showing no signs of slowing down, and it is anticipated that 2024 volumes will again be record-breaking.”
