Cooper added: “A strategy guided by deficits and discount rates can hinder a scheme’s ability to accurately measure chances of success. By adopting an integrated strategy, a scheme’s chances of success can be improved by 50% … with no increase in cash contributions from sponsors now or in the future.”In other news, the aggregate funding position of pension schemes attached to the UK’s 350 largest listed companies improved during November, reported Mercer.The combined shortfall fell from £149bn to £127bn during the month, an improvement of nearly 15%. However, this is still above the level seen prior to the EU membership referendum in June.Le Roy van Zyl, senior consultant, said pension funds had on aggregate benefited from market volatility in the wake of the US presidential election.“Trustees and sponsors should be asking themselves whether this is the time to take off some of the risk that has recently been rewarded, and whether they are comfortable they can deal with the range of scenarios that can emerge in the months and years to come,” he said.The Pensions and Lifetime Savings Association (PLSA), meanwhile, delivered yet more bad news for UK DB funds, reporting that the cost of running a scheme had increased by 37% year on year.The increase was primarily due to rising fund management and custody costs, despite growing pressure on fund management fees in recent years.The PLSA’s annual survey found that the 164 DB schemes surveyed racked up costs of £546 per member. Schemes with fewer than 5,000 members saw costs increase by 63% to £787 per member.Elsewhere, the Environment Agency Pension Fund (EAPF) made a £60m allocation to a private debt fund, as part of a strategic shift to diversify its £2.9bn portfolio and reduce equity risk.After a “comprehensive search” assisted by consultants bfinance, EAPF’s CIO Mark Mansley said the pension fund had selected Permira’s Credit Solutions III fund.Mansley said: “We were impressed by their focus on senior loans with moderate leverage, their track record and their organisational commitment to responsible investment.”According to its website, at the end of March, the EAPF had an allocation to two private debt funds worth roughly £58m. Only one-third of UK pension funds are likely to hit their funding targets in the next 20 years if they do not update their approach to assessment of risk, according to Hymans Robertson.One-quarter of defined benefit funds may see no improvement in their deficit positions in that time period, the consultant warned in a new report, ‘Better future for DB’.Schemes are likely to have swallowed up £100bn (€118.8bn) in deficit-reduction contributions from sponsors, said Calum Cooper, head of trustee consulting.Trustees need to expand their assessment of risks to include not only deficits and discount rates but also investment, covenant and contribution risks.