The aggregate surplus of U.K. defined benefit funds covered by the PPF 7800 index declined 5.8% in March to £359.3 billion ($443.8 billion), as liabilities increased due to lower government bond yields.

The surplus almost doubled for the year ended March 31, from £193 billion, according to a Tuesday update by the Pension Protection Fund, London. The PPF is the lifeboat fund for pension funds of insolvent U.K. companies.

The aggregate funding ratio was 133.2% as of March 31, compared with 137% as of Feb. 28. The funding ratio was 113.1% as of March 31, 2022.

Assets increased by 1.9% for the month and fell 13.6% for the year to £1.44 trillion. Liabilities increased 4.7% for the month and 26.7% for the year, to £1.08 trillion.

Five-to-15-year index-linked gilt yields were down 34 basis points in March and increased by 256 basis points over the year.

The majority of the 5,131 pension funds covered by the index were in surplus as of March 31, at 84.9% down from 86.9% a month earlier. As of March 31, 2022, 65.9% of pension funds in the index were in surplus.

The collapse of Silicon Valley Bank and the merger of Credit Suisse and UBS created a demand for government bonds and supported market consensus regarding the likelihood of a recession later this year or in 2024, said Lisa McCrory, PPF’s chief finance officer and chief actuary, in a news release accompanying the update.

That pushed government bond yields lower in March and increased pension fund liabilities, she said.

“Asset values will have risen less quickly as market interest rates fell, meaning that funding ratios decreased overall,” she added.

Read more @Pensions&Investments