UK Pension funding ratio falls 13% in a year as yield swings continue

Reading Time: < 1 minute Data from the Pension Protection Fund as of March 2015 shows that while the assets of UK pension funds have risen in value by 12% over the last year, falling yields have driven a fall in funding ratio of 13%. The aggregate deficit stands at £292bn (this is down slightly from a recent high of … More UK Pension funding ratio falls 13% in a year as yield swings continue

INFOGRAPHIC: UK DB Pension Deficits Remain Elevated Amid Volatile Yields

Reading Time: 2 minutes Last month I reported on the record deficit level of UK DB pension funds (as reported by the PPF 7800 index). In spite of reasonable asset returns in recent years, the recent large falls in long dated yields had driven liabilities higher (nearly doubling in 5 years). In February the volatility in long dated yields continued, although … More INFOGRAPHIC: UK DB Pension Deficits Remain Elevated Amid Volatile Yields

It’s good to hedge*

Reading Time: 4 minutes There has been a flurry of activity in the longevity swap market over the last 12 months culminating in the mammoth £16bn transaction announced in July 2014 between the BTPS and Prudential. We appear to be seeing a big increase in the size of individual deals, as well as the overall number of deals. Why … More It’s good to hedge*

What is the purpose of a pension scheme?

Reading Time: 3 minutes This was written as a response to this post on mallowstreet.com, which itself was a summary of a presentation given at the annual TUC pensions conference which made several points including advocating pension schemes reject Liability Drive Investing as a “distraction”, and focus instead on future income streams. The blog also questioned the relevance of … More What is the purpose of a pension scheme?

PPF 7800 Index funding level increases 15% in 2013

Reading Time: 2 minutes The December update of the PPF’s 7800 index of pension fund assets and liabilities revealed a sharp increase in funded position for schemes in aggregate over the course of 2013, from a funding level of 83% at the end of 2012, to 98% at the end of 2013. These levels compare to the low point of … More PPF 7800 Index funding level increases 15% in 2013