UK defined benefit (DB) pension schemes saw their deficits rise at the end of April – a reversal of what were improving deficit levels after the UK general election announcement and the first round of the elections in France.
Mercer’s Pensions Risk Survey data showed that the accounting deficit of the UK’s 350 largest listed company DB schemes rose from £133 billion at the end of March to £145 billion on April 28.
Deficits were volatile over the month ranging from £132 billion to £155 billion.
Mercer said that after the announcement of the UK election, there had been a £4 billion improvement in deficit levels. Deficits also improved by £7 billion after the first round of the French election results.
However, deficits finished the month £12 billion higher than at the start.
Asset values at April 28 were £739 billion and liability values had increased by £12 billion to £884 billion, a record level.
Le Roy van Zyl, partner at Mercer, said: “Even though some markets showed some weakness, other areas are strong to the point of being at significant risk of suffering a set-back in the near future. Where possible, trustees and sponsors must therefore be selective in identifying which areas they want to de-risk, and which areas of expected return they want to retain.”
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