Significant risk remains in the Pension Protection Fund's (PPF) universe, despite higher funding levels, the lifeboat says as it launches its 2018 Purple Book.
While the aggregate funding level hit 95.7% as of 31 March this year, nearly two-thirds of schemes were in deficit with an aggregate £187.6bn, demonstrating there was still some way to go for members' benefits to be fully protected.
Across 5,450 schemes included in the dataset - down from 5,588 last year - there was an aggregate deficit of £70.5bn, when scheme surpluses are also included, less than half the £161.8bn recorded in 2017.
It also comes amid serious de-risking in the DB universe and positions are likely to have improved further with a record number of deals in the bulk annuity market as well as "passive" de-risking through member transfers out, the PPF said.
But, with liabilities totalling around £1.6trn, these still represent just a fraction of benefits, it warned.
Chief risk officer Stephen Wilcox said "the whole story is around risk reduction" which is "very welcome, but still a relatively small number".
Additionally, recovery plan lengths have remained static since the PPF was launched in 2005. The average length was 7.8 years as of March, compared to 7.5 in 2017 and 8.1 in 2006.
Wilcox said the PPF would "like to see those recovery plans [lengths] shrink because that will protect members better", but stressed the PPF was in a good position to protect members.
"PPF funding levels are continuing to trend up," he said. "We're now at above 120% which is very good. It's very good to see the PPF in a robust position, ready to stand protecting schemes that need to claim."
And, despite high-profile insolvencies over the last few years, including BHS and Carillion, with the lifeboat fund experiencing its greatest ever volume of claims in cash terms in 2017, the insolvency rate has remained fairly flat at around 0.4% since the third quarter of 2014.
Nevertheless, the PPF did recognise this had started to tick up again, with 91 schemes entering assessment in the year to March 2018, compared to 78 in the same period previously.
Furthermore, since March, the DB schemes of high street names such as Toys R Us and Mothercare, as well as publishing house Johnston Press, have fallen into PPF assessment.
Chief financial officer Andy McKinnon said, however, that the lifeboat fund was on track for its target to be self-sufficient by 2030.
"We do continue to review our strategy but as of today [3 December] I'm happy to say that we remain on track for it and we're well funded to stand behind schemes and the members of schemes when they need us."
The Purple Book also revealed just 12% remained open to new members, the same as last year, while the number closed to new benefit accrual had increased by two points to 41%.
The member demographic remained virtually unchanged, with only the number of pensioner members increasing from 40% to 41%. Deferred members amounted to 47%, while 12% were active members. Of the latter, half were in open schemes, while the other half were in schemes closed to new members.
Meanwhile, schemes have continued to increase their allocation to less risky assets, including bonds, while diversifying their equity holdings.
According to the Purple Book, the average scheme held 59% of its assets in bonds, up from 55.7% last year. Of these, 24.1% were in gilts, 28.8% in corporate bonds, and 47.1% in index-linked bonds.
Some 27% of assets were held in equities, compared to 29% in 2017, with a 40 basis point (bp) increase in overseas equities and a 150bp increase in unquoted or private equities. Meanwhile, 14% of assets were held in other assets, such as property and hedge funds, with 3.4% in buy-in policies with insurers.
McKinnon said there was a "very clear trend" in changing asset allocations, noting the continued reduction in equity exposure and increase in bond allocations shows "an awful lot of de-risking has taken place" which was "very good to see".
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