Pension Schemes Finally Get Out Of Crisis

Since June 2008, the UK’s private sector final-salary pension schemes have finally got out of the financial difficulties and are in an active balance again.

The Pension Protection Fund (PPF) reported that last month was lucrative for the 7,400 pension schemes (£0.3bn). This improvement is rather significant as in February there was a £15bn deficit; though, a year ago the situation was even worse – a £242bn deficit.

Nevertheless, in spite of the general amelioration, 68.5% of schemes are still in financial difficulties and only 31.5% are showing surplus.

Today’s state of things can be commented by the considerable increase in share prices meant the fund’s assets, as opposed to the paying cost for pensions.

Referring to the PPF, March 2010 saw the £915.4bn scheme assets in general with a 3.9% month growth and a 22% growth over the year, respectively. At the same time, over the year to March 2010 schemes’ responsibilities reduced by 7.6% and stood at £915bn, but over the month experienced a 2.1% rise from £895.9bn in February 2010.

The PPF declared that besides share prices growth, the whole state of things had become better, as last October there were serious changes in counting the paying cost for pensions in future. This had led to decreasing the count of the schemes’ responsibilities – the assets worth to meet their pension requirements - by about 8% (£70bn).