The UK’s Defined Benefit pension scheme liabilities remained unchanged in March, according to the latest figures from Xafinity, as equity markets and bond yields show little change since the end of February. Pension deficits increased by £24 billion as the value of scheme assets decreased slightly.
|
£ Billion |
March 2012 |
February 2012 |
March 2011 |
|
Scheme Liabilities |
1,568 |
1,568 |
1,383 |
|
Scheme Assets |
1,061 |
1,085 |
1,011 |
|
Deficit |
507 |
483 |
372 |
Source: Xafinity Corporate Pensions Scheme model, based on all UK DB pensions and using FRS17 and IAS19 accounting rules
However, despite the recent market calm, Xafinity warns that long term uncertainty still remains, with regards to future inflation expectations.
Robert Hunt, director at Xafinity Corporate Solutions said: “There is a lot of uncertainty around what impact the unwinding of Quantitative Easing will have or indeed when it will begin, but it has clearly distorted the market for both conventional and index-linked gilts, making it difficult to predict how inflation expectations will evolve in the next few months and years. In the meantime, companies will continue to contend with much larger pension scheme deficits than they faced a year ago. Given the recent market calm many will hope that the equity rally since the start of the year can gain further momentum, helping to reduce deficits.”
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