Vishal Makkar, Managing Director, UK Wealth Consulting at Gallagher said: “The PPF 7800 shows DB scheme surpluses are climbing again, reaching a total £255.1bn. The UK DB schemes’ strength is underpinned by resilient gilt yields and steady asset performance, creating vital breathing room as trustees make preparations ahead of the new DB funding code. At the same time, the PPF’s landmark decision to set its conventional levy to zero for 2025/26, made possible by the Pension Schemes Bill’s progress in Parliament, is having a measurable impact, particularly for the less well-funded schemes. It reflects the PPF’s own surplus and shows it can maintain a strong safety net without relying on levy payers. For trustees, the updated index will provide fuel for an energetic debate on endgame planning and the best way to put those plans into action. Levy relief and healthy surpluses can unlock an array of appealing options, from buyout to surplus extraction. With the Autumn Budget set to revisit how pensions can support UK growth, timing, governance, and clear sponsor alignment will be critical.”
Sarah Elwine, Actuarial Director at Broadstone, said: “Defined benefit pension schemes saw strong increases in funding levels in September as equity gains drove improvements in asset valuations. The aggregate funding ratio is now at its highest level in nearly two years delivering strong optionality for pension schemes as they consider their strategic aims. The insurance de-risking market has gained pace, as usual, in the second half of the year and many schemes are likely to be in a strong position to approach insurers over the coming months. Insurer capacity is growing and other innovative options to secure members’ benefits are continuing to appear, as we have seen with the recent announcement of a new superfund. Given market volatility remains, trustees should continue to observe their funding position and investment strategies so that they remain well-placed to achieve their long-term objectives.”
The PPF 7800 index | Pension Protection Fund.
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