New data published by the Pension Protection Fund, Britain's savings safety net, shows that the total assets of the 5,215 defined benefit retirement plans that it monitors totaled £1,732 billion at the end of February, down £24.8 billion from £1,757 billion in January.
The data also showed that the aggregate surplus of the schemes fell to £133.6 billion at the end of February, down from £146.4 billion at the end of January.
Lisa McCrory, chief finance officer at the fund, said, "While the aggregate funding position for the 5,215 defined benefit schemes we protect remains positive overall, a fall in global equity assets, offset by an increase in most bond yields, has seen the aggregate surplus fall to £133.6 billion.
"This also means more schemes are in deficit with an increased aggregate deficit of £83.1 billion. Although the change at an aggregate level is small, the impacts on some individual schemes may be more significant," she continued.
Vishal Makkar, head of retirement at Buck, a consultancy, also noted the drop in the aggregate surplus and warned that "this may well be the calm before the storm though, and there could soon be more volatility on the way," as Russia's invasion of Ukraine continues to affect global markets.
"Investment markets have already experienced serious turmoil, and it's still difficult to predict what the likely long-term effects might be," Makkar said.
Another consultancy, XPS, said its DB UK funding tracker, which monitors the funding position of U.K. defined benefit pension schemes, shows that total scheme assets fell by £25 billion over the month to the end of February.
XPS said the drop reflected "the significant impact on global markets of the Russian invasion of Ukraine. Whilst attributing market movements to specific events is problematic, global markets experienced significant swings over the last month as the likelihood of conflict in Ukraine increased."
XPS also observed that European equity markets had suffered a sharp shock, with the FTSE 100 and Euro Stoxx indexes both falling around 4% on the day of the invasion.
"The scope for the situation to deteriorate further is self-evident. However, markets are forward-looking and therefore current news and the potential for further deterioration may already be factored into prices," said Simeon Willis, chief investment officer at XPS. "Consequently, this may not represent a sensible time for whole-scale changes in strategy."
Russian forces entered breakaway regions of eastern Ukraine in February, leading Western governments to start slapping sanctions on financial businesses and individuals in Russia. The West and global financial institutions have ratcheted up sanctions since then, with many firms shutting their offices in Russia.
The sanctions have attracted the interest of watchdogs in the financial services sector.
Britain's pensions regulator called on retirement funds on Friday to review their investment exposures and to comply with U.K. sanctions on Russia.
--Additional reporting by Najiyya Budaly and Martin Croucher. Editing by Joe Millis.
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