Pensions - Articles - DB scheme funding improves in May as endgame options widen

 The Broadstone Sirius Index – a monitor of how various pension scheme strategies are performing on their journeys to self-sufficiency – posts its latest update.

 The Broadstone Sirius Index reports its update for May 2025 – a month which saw equity markets recover some of their losses from the opening quarter of 2025 and long-term interest rate expectations rising despite the cut in short-term rates.

 These trends caused the funding positions of both of the index’s schemes to improve over the month, with Broadstone’s fully hedged scheme improving 0.2% and the deficit reducing by £0.2m. An environment of rising long term interest rates will benefit schemes that have not fully hedged, as evidenced by a significant funding improvement for our 50% hedged scheme. Its funding level improved by over 2 percentage points from 103.6% to 105.8%, corresponding to a £0.5m increase in its surplus.

 Chris Rice, Head of Trustee Services at Broadstone, commented: "While markets continue to be volatile, DB pension scheme funding continues to hold steady. May was particularly encouraging, with a funding improvement realised whether the scheme was fully hedged or not. The growth in the surplus on a low dependency basis comes just as more detail is published on the potential for surplus release via the Pension Schemes Bill, with the rules around extraction set to be eased.

 “The new options granted by the Pensions Bill, and new guidance from the Regulator on issues to consider when deciding on strategies, are broadening what was previously a relatively short conversation for most schemes. Along with continued improvements in funding this will provide plenty of food for thought for Trustees and Employers as they consider their long-term strategy and endgame objectives.”