The overall surplus of Santander's defined benefit (DB) pension scheme has risen by £595m to almost £800m since the end of 2017.
The bank's half-year results published today (13 August) showed the surplus on an accounting basis continued to rise over the first half of the year, largely as a result of a higher discount rate driven by rising corporate bond yields.
When the scheme is split into sections in surplus and deficit, those in surplus had a £868m buffer as of 30 June from £449m at the end of 2017, while sections in deficit saw their funding gap fall to £69m from £245m.
The pension sections have increased their interest rate hedging from 57% at the end of 2017 to 61% at the end of H1 2018, while the inflation rate hedging ratio rose from 64% to 67%.
The report said: "We continue to focus on achieving the right balance between risk and reward. In H1, overall asset returns were broadly flat. Our long-term objective is to reduce the risk of the scheme and eliminate the deficit on a funding valuation basis."
The bank also had unfunded pension scheme liabilities of £39m as of 30 June 2018.
PP recently reported Paul Trickett's appointment as the next chairman of the Santander UK Pension Scheme Trustee, replacing Lord Shuttleworth who stepped down after a long association with the scheme.
Defined benefit (DB) schemes that provide GMPs must revisit and, where necessary, top-up historic cash equivalent transfer values (CETVs) that have been calculated on an unequal basis, a landmark court judgment said last week.
Regulators must act now to impose some "proper regulation" to stop another defined benefit (DB) transfer advice disaster, saysTim Sargisson.
Opportunities for defined benefit (DB) schemes to pursue investment approaches that help repair the UK’s economy cannot stand in the way of improving member outcomes, Aegon says.
More members transferred out of defined benefit (DB) pension schemes in October after September's record lows while values were surprisingly stable, according to XPS Pensions Group's Transfer Watch.
Joanna Smith says trustees will need to accurately identify if covenant issues are short-term affordability concerns, or the start of more material deterioration.