DB schemes’ surplus falls by £7.6bn in November

This meant that the surplus decreased to £371.5bn at the end of last month from £379.1bn in October.

Section 179 liabilities, the level of assets needed to secure PPF-level benefits with an insurer, were 133.7 per cent funded in November, down from 136 per cent in the previous month.

By the end of November, total assets in DB schemes stood at £1.47tn, while total liabilities were £1.1tn. There were 746 schemes in deficit and 4,385 schemes in surplus, the PPF stated.

The aggregate shortfall of the schemes in deficit at the end of November was £5.8bn, up from £4.8bn in the previous month.

According to PPF chief finance officer and chief actuary Lisa McCrory, the “increase in scheme liabilities and assets in November was mostly driven by a fall in bond yields”.

“The main drivers were the UK government’s Autumn Statement and a tweak to the outlook for monetary policy, with central banks now expected to slow the pace of rate hikes in the coming months.

“While bond yields fell during November, they remain well above the levels that they started the year. This is reflected in the fact that the bounce-back in assets and liabilities in November is small relative to the falls over previous months.”

Broadstone senior actuarial director Jaime Norman noted: “Despite this month’s dip in the total surplus, scheme funding has improved significantly throughout the year and will have taken many schemes closer to endgame than they would have planned for.

“Looking ahead, 2023 looks like it will be an incredibly busy year for the derisking market given the improvements in funding levels,” he continued.

“In such a crowded market, only those trustees and employers that are best prepared will be able to capitalise on these opportunities so forward planning remains key.”