Vishal Makkar, Head of Retirement Consulting at Buck in the UK comments: “Despite a small fall in assets, a larger fall in liability values saw the aggregate surplus of the schemes in the PPF Index increase over the course of December to £129.3 billion. This left the funding ratio at 107.7% at the end of the last year.
“As schemes begin their third year of the Covid pandemic, today’s figures suggest that markets have found some degree of stability and really have learned to live with the virus. Covid is still a potential source of volatility, as this latest Omicron spike has proved, but it’s no longer on the same scale as the initial impact it had in 2020.
“The next phase of the pandemic for pension schemes is likely to be shaped by the ongoing economic recovery from Covid. Already the Bank of England has shown its willingness to raise interest rates to fight inflation, as the UK economy drags itself back up to speed.
Further involvement from central banks, more inflationary pressure, and continuing supply chain issues, will impact many scheme sponsors and will all require careful thought and consideration from trustees in the year ahead.”
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