New figures released today from PwC’s Skyval Index show the deficit of defined benefit (DB) pension funds stood at £520bn at the end of February 2017, a £50bn increase since last month. The analysis also shows that it will take until 2050 to halve the value of today’s total liabilities (in current monetary terms).
PwC’s Skyval Index, based on the Skyval platform used by pension funds, provides an aggregate health check of the UK’s c.5,800 DB pension funds. The current Skyval Index figures are:
The funding measure is the approach used by pension fund trustees to determine company cash contributions (see notes to editor for definitions on deficit measures).
Raj Mody, PwC’s global head of pensions, said:
‘A decrease in long-term yields of around 0.1% per annum since the end of January led to an increase in liability values, causing the overall deficit to climb to £520bn. The deficit increase was offset to an extent by a £40bn increase in asset values.
‘The DWP pensions Green Paper released last week suggests there is no across-the-board systemic DB pension problem, and also suggests deficits are generally affordable. However, the Green Paper does not address fundamental questions about whether employers should be on the hook at all for deficits which have largely arisen due to external forces, including regulation.
Given that, we expect a robust industry response wanting to develop concessions around inflation measures, for example, despite the challenges this presents for member expectations.’
Publicnow.com
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