Fully hedged defined benefit (DB) pension scheme funding levels fell in February, while half-hedged schemes stayed almost constant, according to the Broadstone Sirius Index analysis.

The Broadstone Sirius Index, which monitors how various pension scheme strategies are performing on their journey to self-sufficiency, revealed that the fully hedged scheme’s funding level fell by 0.6 percentage points, from 68.4 per cent to 67.8 per cent after gilt yields rose 0.1 per cent during the month.

Meanwhile, the funding level of the half-hedged scheme remained mainly constant as it rose by 0.1 percentage point to 97.1 per cent.

Both deficits ended the month broadly at the same level they started at, with £9.1m for the hedged scheme and £0.8m for the half-hedged scheme, with a slight fall in assets and liabilities.

Broadstone head of trustee services, Chris Rice, commented that the “continued funding” over the last year and in February “has allowed trustees and employers to digest recent announcements of new funding regulations, options around surpluses, buyout and consolidation as well as the Regulator’s General Code”.

He continued: “There will be much for employers and trustees to do to make the most of recent and forthcoming changes, as well as complying with new regulations and guidance.

“The issues faced by individual schemes will be significantly different, as illustrated by the diverging fortunes of our tracked schemes. While some will be discussing surplus, run on, consolidation or buy-out, others will be concerned as to how the employer will afford the new funding requirements.

“In both cases it is essential that trustees and employers engage with their advisers to fix the roof while the sun shines and make progress in stable funding times.”

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