The UK has made great progress to overcome the COVID-19 pandemic, but the fight is far from over. Effective vaccines have given hope just as mutant strains present new challenges. The first UK lockdown in response to the pandemic began in March 2020. How have UK Defined Benefit (DB) pension schemes fared since then?
To answer that question, we examine the evolution of Section 179 (s179) funding levels from the Pension Protection Fund (PPF). This looks at the universe of UK private DB schemes eligible for entry into the PPF and is based upon compensation paid by the PPF, which may be lower than full scheme benefits. To set the scene, at the end of 2019, the aggregate scheme funding ratio (the ratio of a scheme’s total assets to liabilities) was 99.4%.