Pensions - Articles - PPF 7800 Index

 This update provides the latest estimated funding position, on a section 179 (s179) basis, for the defined benefit schemes potentially eligible for entry to the Pension Protection Fund (PPF). A scheme's s179 liabilities represent, broadly speaking, the premium that would have to be paid to an insurance company to take on the payment of PPF levels of compensation. This compensation may be lower than full scheme benefits. Movements in the PPF 7800 index illustrate how the PPF's exposure to the scheme deficits in its universe of eligible schemes is changing in response to financial market movements. It should be noted that the PPF 7800 index does not take into account schemes' use of derivative instruments to hedge changes in interest rates or equity markets.

 Highlights

 The aggregate deficit of the 6,533 schemes in the PPF 7800 index is estimated to have increased over the month to £255.2 billion at the end of December 2011, from a deficit of £222.1 billion at the end of November.
 The funding ratio fell from 81.9 per cent to 80.0 per cent.
 Total assets were £1018.9 billion and total liabilities were £1274.1 billion.
 There were 5,473 schemes in deficit and 1,060 schemes in surplus.