Pensions - Articles - Middle East conflict causes scheme funding deterioration

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

The Broadstone Sirius Index has rebased for 2026, tracking a ‘growth focused’ and a more conservative ‘matching focused’ investment strategy against a low dependency basis*. Both schemes started 90.0% funded at the start of 2026.

Reporting its update for March 2026, the Broadstone Sirius Index found that both schemes unsurprisingly reversed gains that had been made through February and January of 2026 during the month in the face of considerable economic and market volatility.

The funding level of the ‘matching focused’ scheme decreased by 1.7 percentage points from 90.3% at the end of February to 88.6% at the end of March.

The funding level of the ‘growth focused’ scheme fell back slightly more, by 1.8 percentage points, but from a higher starting point given the positive growth returns over January and February. The funding level fell from 90.8% at the end of February to 89.0% at the end of March ending the quarter slightly ahead of the ‘matching focused’ scheme.

Chris Rice, Head of Trustee Services at Broadstone, commented: "The last few years have been incredibly strong for the health of defined benefit schemes, allowing many investment strategies to be derisked to protect scheme funding positions.

“Most schemes shouldn’t be experiencing a significant change in funding in the first quarter of 2026, with the deterioration in March generally reversing January and February’s gains.

“The instability will no doubt cause concerns for trustees and sponsors however and trustees should be regularly monitoring their liquidity, hedging levels and LDI resilience.”