A scheme’s 179 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.
Highlights
• The aggregate deficit of the 5,422 schemes in the PPF 7800 Index is estimated to have increased to £176.3 billion at the end of May 2020, from £128.5 billion at the end of April 2020.
• The funding ratio decreased from 93.1 per cent at the end of April 2020 to 90.9 per cent.
• Total assets were £1,769.4 billion and total liabilities were £1,945.7 billion.
• There were 3,621 schemes in deficit and 1,801 schemes in surplus.
• The deficit of the schemes in deficit at the end of May 2020 was £290.1 billion, up from £256.4 billion at the end of April 2020.
Lisa McCrory, PPF Chief Finance Officer and Chief Actuary said: “This month the funding ratio as measured by the PPF 7800 Index has gone down despite improvements in equity markets as the expectation of future inflation has increased the liabilities of schemes. Although many schemes do have some exposure to inflation linked assets, the falling index linked gilt yields have increased scheme liabilities by more than the assets. The impact on individual schemes will vary according to the investment strategies adopted.”
For a more in-depth look at the monthly changes
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