Skip to main content

The Purple Book, published by the PPF, gives the most comprehensive picture available of the risks faced by DB schemes in the UK. 

While the aggregate funding ratio of schemes has improved, there are still a significant number of schemes that are underfunded. At 31 March 2019, the point at which data in the book was taken, 57 per cent of schemes were in deficit, with an aggregate deficit of £160bn. 

The overall trend for de-risking has continued, with only 24 per cent of scheme assets invested in equities, compared to 27 per cent of scheme assets in 2018 and 61 per cent in 2006. However, underfunded schemes tend to be the ones invested more heavily in equities. Overfunded schemes have on average 69 per cent of their assets in bonds, compared to just 25 per cent for those schemes with a funding ratio below 50 per cent.

The latest edition of The Purple Book also reveals:

  • The universe of DB schemes continues to shrink. There are now 5,436 schemes, comprising 10.1m members 
  • The funding ratio of all schemes has improved from 97 per cent to 99 per cent
  • The deficit of schemes in deficit has also improved to £160bn on a PPF (s179) basis

Stephen Wilcox, Chief Risk Officer at the PPF commented: “While many schemes have reduced their investment risk, the deficit of schemes in deficit is more than double what it was in 2006 and the economic circumstances much less favourable. The funding ratio of schemes in deficit is particularly vulnerable to economic shock.

“Although the PPF is much better equipped to manage that risk than we have ever been – our own funding ratio is stable, we have years of experience under our belt and we have a healthy reserve to fund future claims – the potential claims of underfunded schemes pose a significant risk, which is beyond our control.”

Lisa McCrory, Chief Actuary at the PPF added: “The long tail of small, underfunded schemes is a particular concern. 58 per cent of schemes with 100-999 members are less than 75 per cent funded. 

“Our focus is to manage our own funding prudently, to manage our balance sheet effectively and to understand the risks we face. At this stage of our evolution, a probability of success around 90 per cent indicates a high level of confidence that we are on track to meet our funding target.”

Download The Purple Book 


For further press information contact:

PPF Press Office
020 8406 2107
[email protected]