Pensions - Articles - PwC's Chief Actuary on Pension deficit falling to £420bn


New figures released today from PwC’s Skyval Index show the deficit of defined benefit (DB) pension funds stood at £420bn at the end of July 2017, a £40bn decrease since last month

 PwC’s Skyval Index, based on the Skyval platform used by pension funds, provides an aggregate health check of the UK’s c.5,800 DB pension funds. The current Skyval Index figures are:

 

  

 Steven Dicker, PwC’s chief actuary, said: “The funding liability at the end of July stands a little lower than the end of June so, with relatively static asset values, this has led to the third consecutive monthly decrease in deficit.

 “As a result, the proportion of liabilities covered by assets of UK pension schemes has reached its highest point since the Autumn of 2014, at 78.7%. However, the monetary value of the gap between assets and liabilities, at £420bn, remains higher than what it was 3 years ago.

 “Part of this is due to schemes not being hedged against the fall in gilt yields, to what have been historically low levels. However, while this hedging would have reduced the disclosed deficit on the "gilts plus" funding approach, it is important to realise this wouldn't necessarily improve the actual long-term outturn for schemes.”

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