UK - The Pension Protection Fund's 7800 index has seen its surplus more than double since the end of last year, according to figures for January.

According to the PPF, the average funding ratio has now risen to 105%, while the surplus across all funds has increased from £21.7bn in December to £46.1bn last month.

Assets in all schemes have risen by more than £100bn in the last 12 months, up from £872bn to more than £973bn, while scheme liabilities decreased by more than £30bn since December.

The PPF attributed the drop in scheme liabilities to increased gilt yields in January, while noting that a weakened FTSE All-Share index had resulted in a slight drop in assets compared with the end of 2010.

Meanwhile, Xafinity Consulting has warned that inflation should be closely monitored by UK defined benefit (DB) schemes, even if the measure of inflation was recently lowered through the shift to the consumer price index (CPI).

Hugh Creasy, director of the consultancy, further warned that de-risking needed to remain a priority.

"You need to be nimble to implement de-risking plans," he said. "This means advance preparation, careful choice of triggers, together with closer monitoring to spot the moment now, not last week."

Creasy added: "The change to CPI will be helpful to corporate sponsors, but has a far more modest effect than some early commentators suggested. The real concern is over inflation - however you measure it - taking off in the shorter term and driving up liabilities."

Finally, the NA Motors Pension Scheme has been successfully transferred to the Financial Assistance Scheme (FAS), the security net in place for schemes that wound up before the introduction of the Pension Protection Fund.

The scheme's sponsor, a local Ford dealership, began winding up 13 years ago.

Dalriada Trustees, appointed scheme trustees in 2009, oversaw the successful transition to the FAS.

Connie Johnstone, director at Dalriada, thanked the FAS case worker assigned to them during the transition period for their hard work.

"Unfortunately, the reality today is that many schemes winding up are often seriously underfunded," she said. "Many do not have a solvent sponsoring employer, which makes FAS invaluable to members and their families."

Johnstone said she was proud to have spearheaded the first scheme employing contracting out into the FAS, which is overseen by the PPF.

Topics