PPF 7800 surplus jumps £25bn in September

The funding ratio increased over the same period, from 104.7 per cent in August to 106.4 per cent in September, higher than at the same point last year (93.5 per cent), while for the 2,383 schemes in deficit the aggregate deficit was down from £130.2bn to £109.4bn.

Some 2,935 schemes were in surplus and total assets were £1.8tn, while total liabilities amounted to £1.69tn. 

By contrast, there were 2,483 schemes in deficit at the end of August 2021 (46.7 per cent) and 3,373 schemes in deficit at the end of September 2020 (63.4 per cent).

Vishal Makkar, head of retirement consulting at Buck, said: “DB scheme funding positions remained solidly in surplus in September, as they have done since February 2021. Small movements in both liabilities and assets did little to dent the healthy outlook for the schemes in the PPF index.

“The strong funding position potentially gives many trustees a much-needed chance to take a more strategic view and focus on some of the more long-term challenges facing their schemes.

“October 1 saw the Pension Schemes Act come into force, meaning that schemes will now have to start complying with the Task Force on Climate-related Disclosures reporting framework,” he continued.

“ESG has been an increasingly important consideration for scheme trustees, and with COP26 also due to start at the end of the month, the focus on these issues is only likely to grow. For proactive trustees, this should be an opportunity to rise to the challenge posed by the climate emergency.”

Makkar added: “Also due towards the end of the month is the Autumn Budget, meaning that trustees and sponsors may soon have even more work on their plates.

“All indications suggest that the Treasury remains serious about raising taxes to cover the cost of its pandemic spending and pension tax relief could be in the firing line. Once again, proactive engagement and strong contingency planning will be the keys to success.”