Defined benefit (DB) schemes ended 2017 with a much-enhanced funding position than at the start of the year, JLT Employee Benefits has recorded.
As of 31 December, the aggregate deficit of the UK's private sector DB schemes had fallen by £37bn to £150bn on the IAS 19 accounting measure compared to the same date in 2016.
Assets totalled £1.6trn at the end of the year, while liabilities amounted to £1.8trn.
Meanwhile, the funding ratio had improved by 6.2 percentage points over the year, rising from 85.3% to 91.5%.
The figure is also an improvement on November 2017, when the deficit was recorded at £161bn with a funding ratio of 90.8%.
Director Charles Cowling said market performance, interest rate expectations, and longevity assumptions had all fed into the improvement.
"2017 was a turbulent year for pension schemes but one with many positives," he said. "Markets were strong in the face of considerable political uncertainty and we have, finally, signs that interest rates are on the way up.
"Additionally, the latest mortality analysis points to a slowing down in the rate of increasing longevity. All of this is good news for pension scheme deficits which have shown some significant improvement over the past year."
A similar story was told for FTSE 100 schemes, which saw their deficits fall by £14bn over the year, reducing from £55bn to £41bn. The funding ratio improved from 92.3% to 94.4%.
Cowling added that buyout deficits had also improved over the year, which could lead to a bumper £30bn of de-risking deals this year.
"At JLT, we are seeing strong evidence that the pension buyout market is showing signs of taking off as competition between insurers is heating up and prices are getting keener," he continued. "With over £12bn of deals transacted in 2017, all signs point to an even stronger year in 2018, where it is possible that up to £30bn of deals could be transacted."
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.