U.K. corporate funds finish 2020 with increased deficits
The total deficit of U.K. defined benefit funds covered by the Pension Protection Fund’s 7800 index increased 9.6% in December, to £86.4 billion ($117.3 billion).
The deficit was £78.8 billion at the end of November. Deficits also worsened for the year ended Dec. 31, from £10.9 billion, said an update Tuesday by the London-based PPF.
The PPF is the lifeboat fund for the defined benefit plans of insolvent U.K. companies. The funding ratio of the corporate pension plans worsened slightly to 95.5% as of Dec. 31, down from 95.8% as of Nov. 30.
The funding ratio was 99.4 % as of Dec. 31, 2019, the update said. Assets were up 1.9% during the month and rose 7.9% for the year ended Dec. 31, to £1.83 trillion. Liabilities increased 2.3% over the month and increased 12.3% for the year, to £1.92 trillion.
The FTSE All-Share index was up 3.9 % for the month and fell 9.8% for the year ended Dec. 31, the PPF said. Five- to 15-year index-linked gilt yields decreased 7 basis points in December and declined 59 basis points over the year.
As of Dec. 31, 60.3% of the 5,318 pension funds covered by the index were in deficit, compared with 60.5% as of Nov. 30. As of Dec. 31, 2019, 55.3% of the 5,422 pension funds were in deficit.
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