The combined funding level of the UK's 5,450 defined benefit (DB) schemes increased by 90 basis points (bps) over February, latest Pension Protection Fund (PPF) data shows.
The lifeboat's monthly update, revealed the aggregate deficit on a section 179 basis had fallen to £8.6bn by 28 February, from £23.1bn at the end of January .
Total scheme assets were unchanged over the month at £1,603bn, while liabilities decreased by 0.9% over the month to £1,612bn. The overall aggregate funding level improved slightly from 98.6% at the end of January to 99.5%.
In total there were 3,117 schemes in deficit and 2,333 schemes in surplus, moving from 3,271 and 2,179 respectively.
February saw 10-, 15- and 20-year fixed interest gilt yields rise by 9bps, 10bps and 9bps respectively, while the FTSE All-Share Total Return and FTSE All-World Ex-UK Total Return indices grew by 2.3% and 1.5%.
Blackrock head of UK strategic clients Andy Tunningley said while risk assets continued to bounce back following last quarter's sharp declines, gains in equity markets were offset by gilt yield rises and spread widening.
He added: "As funding levels continue to improve, and with more schemes than ever adopting liability hedging strategies to protect against sudden yield falls, trustees' thoughts are increasing turning towards ‘end-game' planning: what is our target; by when do we want to reach it; what do we do when we get there?"
He noted that for many schemes the target may be self-sufficiency on a prudent basis, with a pensioner buy-in then on the cards followed by a full buy-out in time.
"However we are seeing increased interest in DIY buy-ins as trustees realise the opportunity cost of hedging longevity risk, especially when life expectancy is declining as the latest mortality projections have shown."
Last week, the Continuous Mortality Investigation's latest data revealed mortality improvements have declined for yet another year, which will result in further liability value falls where adopted.
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