UK company pension deficit down 34 pct in Oct

The total pension deficit of UK corporate pension funds fell by more than a third in October, despite a dip in stock markets, mainly due to changes in the method of assessing pension liabilities.

The Pension Protection Fund (PPF), the agency set up in 2005 to pay compensation to the members of underfunded pension funds when their sponsors goes bust, said on Tuesday the aggregate deficit fell to 97.6 billion pounds ($163 billion) from 148.9 billion pounds in September. The deficit was 77.6 billion pounds in October last year.

Over the month, pension assets decreased due to a fall in both UK and global equity markets. The FTSE All Share Index fell by 1.9 per cent in October. Pension liabilities also rose on the back of lower gilt yields, the PPF said.

The PPF said the new actuarial assumptions reflected "more accurate" figures provided by schemes and reduced liabilities by about 7 percent in October.

Had the actuarial change not occurred, aggregate funding deficit would have worsened over October to 168.8 billion pounds, it added.

The number of schemes in deficit in October fell to 5,867from 6,174 in September.

Last week the PPF said its deficit more than doubled to 1.2 billion pounds in the 12 months to end-March.