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Law360, London (April 13, 2021, 11:51 AM BST) -- The funding position of retirement schemes in Britain improved dramatically in March, according to statistics from the pensions lifeboat fund on Tuesday, as the country looks to recovery following the partial lifting of the COVID-19 lockdowns.
The Pension Protection Fund said that the aggregate surplus of an index of just over 5,300 defined benefit retirement schemes rose to £34.2 billion ($47 billion) at the end of March, compared with a surplus of £14.6 billion in February — more than twice the amount.
The numbers reflect a growing recovery in funding for pension plans after a punishing year in which the PPF's index has reported record deficits. The healthier picture emerged after the government partially lifted lockdown restrictions on Monday, allowing non-essential shops and hospitality businesses to open, if only partially in some cases.
But Lisa McCrory, chief finance officer at the PPF, sounded a note of caution. "Although these recent market movements appear encouraging, we remain mindful that this continues to be a volatile position," she said.
More than 2,700 of the schemes in the index were in deficit, while almost 2,600 were in surplus. The total funding shortfall among those in deficit was £144.3 billion last month, a slight improvement from the £154.4 billion at the end of February.
The value of assets held by retirement plans increased slightly from £1.74 trillion to £1.75 trillion, while liabilities remained roughly the same at £1.72 trillion.
Vishal Makkar, head of retirement at pensions consultancy Buck, said the partial lifting of Britain's lockdowns would benefit companies that sponsor pension schemes.
"The latest rule changes should prove a boost for hard-hit businesses in the hospitality sector, and the country's slow but positive progress has provided some much-needed stability for the market," Makkar said. "Schemes and sponsors alike will hope that the whole of the U.K. can continue to steadily and safely reopen without seeing a rise in COVID case numbers."
Pension schemes have steadily recovered from aggregate deficits that reached as high as £288 billion in June last year, falling to £65 billion in January, before reaching a surplus of £14.6 billion in February.
--Additional reporting by Irene Madongo. Editing by Ed Harris.
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