The aggregate funding position of the UK’s defined benefit (DB) pension schemes remained in surplus in April, with the PwC Pension Funding Index showing that schemes are, on average, in a “clear surplus position”.

The index also revealed that asset and liability values both fell "slightly" over May by around £10bn, with asset values falling to £1,790bn and liabilities declining to £1,760bn.

This resulted in a similar position to the £30bn surplus recorded in April, which was the first time that a surplus was recorded since the index was established in 2014.

PwC highlighted the consistent positioning as demonstration of the relative stability in the market, with the aggregate funding position based on schemes’ own measures also staying out of deficit for the past four months.

PwC partner and global head of pensions, Raj Mody, commented: “Our funding index illustrates that pension schemes on the whole are in a good position.

“The aggregate surplus position reflects significant cash injections from sponsors over the last decade, and more recent improvements in market conditions.

“Trustees and sponsors should take comfort from this and use this period to define and lock into a long-term strategy."

Mody also warned that it is important that trustees are not "distracted" by other measures, such as the accounting position, explaining that the accounting measure is not helpful for assessing performance against a real-life strategy in practice.

“Similarly the buyout measure, and any apparent deficit against that, is only relevant if you are planning to transfer your scheme to an insurance company as part of your strategy," he continued.

“There is a danger that trustees and sponsors can drown in the variety of measures surrounding their scheme, but should remain focused on the relevant metrics for their scheme-specific strategy.”

PwC’s Adjusted Funding Index, which incorporates strategic changes available for most pension funds, including a move away from gilt investments to higher-return, cashflow generative assets, and a different approach for potential life expectancy improvements that are yet to occur, showed a £210bn surplus.

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