Defined benefit pension funding 'improves'

15 November 2007
The latest Pension Protection Fund (PPF) 7800 Index has revealed that the aggregate funding position for define benefit pension funds "improved" last month.

According to the PPF, this figure rose to a surplus of £53 billion in October, up from £44 billion during the previous month.

"This is much more favourable than October 2006, when schemes had an aggregate deficit of £28 billion," the PPF said.

Meanwhile, the organisation estimated that the total deficit of schemes in deficit last month was also more positive, having reduced from £50 billion in September to £48 billion.

Overall, the deficit has fallen "substantially" over the course of the last 12 months, it noted.

The PPF was created to provide compensation to eligible members of defined benefit pension schemes affected by employer insolvency, when there are inadequate assets in the scheme to pay them more than the level of compensation offered by the body.

Established under the Pensions Act 2004, the PPF began operating on April 6th 2005.

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