The National Association of Pension Funds (NAPF) commented on the latest Pension Protection Fund (PPF) 7800 Index. The deficit of pension funds covered by the Index is estimated to have increased over the month to £222.1 billion at the end of November 2011, from a deficit of £158.6 billion at the end of October.
Joanne Segars, NAPF Chief Executive, said:
“A hike in liabilities has sent many pension funds deeper into the red. Gilts are important in the financing of pension funds, but the yields they offer are damaged by quantitative easing. The latest round of £75bn will only have made things worse.
“The PPF figures are only a snapshot, and can vary greatly from month to month. This does not reflect the long-term health of pension funds, which work over a long timeframe and are well placed to smooth out market volatility. Private sector workers in a final salary scheme should not get too worried by these figures, and their pensions enjoy a strong level of protection.
“The Pensions Regulator must help pension funds deal with quantitative easing by giving them some breathing space. Possibilities include being flexible about recovery periods, smoothing valuation results, and postponing valuation dates.”
Notes to editors:
The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,200 pension schemes with some 15 million members and assets of around £800 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]