Shalin Bhagwan, PPF Chief Actuary said: “Over the last month the aggregate surplus of the 5,131 schemes in the PPF 7800 fell by £5.5 billion to £441.1 billion. We’ve also seen a slight uptick in the estimated number of schemes in deficit – increasing from 461 at the end of September to 473 at the end of October – while the deficit of these scheme increased from £2.2 billion to £2.3 billion. Despite these changes, the funding ratio has remained level at 147.5 per cent.
"However, the unchanged funding ratio masks a somewhat challenging month for asset markets with global bond markets grappling with continued heavy government issuance as well as the uncertain long-term outlook for interest rates; the latter potentially driven by divergent views amongst central bank policy makers in response to incoming economic data. This led to market volatility, both in gilts and return seeking assets, and the overall result was that the estimated value of both assets and liabilities fell slightly.
"In light of the marginal changes seen in the aggregate surplus of schemes and an increase in the number of schemes in deficit, it is important to bear in mind the approximate nature of the PPF 7800 in projecting assets and liabilities. However, as our Chief Investment Officer, Barry Kenneth, said while giving evidence at the Work and Pensions Select Committee last week, it plays a vital role in helping us to understand the underfunding risk in the PPF eligible universe, where it also provides context for the wider PPF levy and investment strategies.”