Date:

Pensions Protection Fund publish 9th Annual Purple Book

Comprehensive data and analysis on the defined benefit pensions' landscape

Whilst most new pension provision for employees (under the auto-enrolment regime) is expected to be defined contribution (money purchase) in nature, the Pensions Protection Fund (PPF) has published its 9th annual Purple Book which summarises the current scene for defined benefit pension schemes in the UK (based on the data from PPF Eligible pension schemes).

For more information you can visit the PPF website or contact one of our Pension team members, but some of the key elements are set out below:

Schemes status

It will not come as a surprise that schemes continue to:

  • Close to new members.
    13% are open to new members, in contrast to 14% last year and 36% in 2007.
  • Close to future accrual. 
    32% in contrast to 30% last year, and 16% in 2007.

Memberships

In addition the categories of membership, there were:

  • 1.81 (16%) million active members.
  • 5.06million (46%) deferred members.
  • 4.23 million (38%) pensioner members.

Scheme funding

The aggregate funding position on a PPF (s179) level was 97%:

  • Number of schemes: 6,057.    
    (7,751 in 2006 and 6,150 in 2013)
  • Assets: £1,137.5 billion.         
    (£769.5bn in 2006 and £1,118.5bn in 2013)
  • Liabilities: £1.176.8 billion.     
    (£792.2bn in 2006 and £1,329.2bn in 2013)

And on a full buyout level was 67%

  • Assets: £1,137.5 billion.        
    (£769.5bn in 2006 and £1,118.5bn in 2013).
  • Liabilities: £1,690.3 billion.     
    (£1,273.5bn in 2006 and £1,826.7bn in 2013).

Schemes closed to new members and closed to future accrual show higher weighted average funding levels than open schemes and 41% of the PPF (s179) liabilities are in respect of pensioner members.

Also in the news …

  • Insolvency rates for sponsoring employers rose less than the national insolvency rate.
  • Schemes continue to de-risk.
  • The reduction in equity share investments has slowed but allocation in overseas equity shares has more than doubled the UK equities shares.
  • The PPF compensation payments continue to increase as more schemes pass through the assessment periods.

Author: Lucy Herbert

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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Katie Kerr

Senior Associate

I am a Senior Associate based in Glasgow and have been specialising in pensions law since 2000.