The Pension Protection Fund 7800 Index, which tracks the level of underfunding risk in the PPF-eligible universe using the latest scheme return information provided to The Pensions Regulator, showed that the aggregate surplus declined slightly last month, from £239.0bn in January to £232.7bn at the end of February.
The funding ratio consequently declined from 127% to 126.1%.
“Despite markets experiencing considerable intra-month volatility in February in response to geo-political news and frequent announcements on tariff policy, the aggregate moves over the month were relatively muted. This resulted in little change across PPF 7800 index metrics at the month-end,” said Shalin Bhagwan, PPF Chief Actuary.
The number of schemes in surplus dropped to 3,691 remaining at around three-quarters (74.3%) of all schemes in the universe.
“Despite increasing macro-economic volatility through February, the pension scheme funding environment remains relatively muted with just a minor deterioration in funding levels. It is encouraging that funding positions are holding steady but with market turbulence on the march, trustees and sponsors will have to ensure they are assessing their investment strategy to ensure they are well-protected in the months to come,” said Jaime Norman, Senior Actuarial Director at Broadstone.
“For schemes that can maintain a healthy funding position, the formal entrance of another insurer into the bulk annuity market – the fourth new entrant in under two years – is evidence of the growing endgame opportunities and capacity in the derisking market for well-prepared schemes,” he added.