-
Investment Performance Means PPF in Good Shape to Face Future
-
Annual Report shows 25 per cent investment return and £1.07bn surplus
-
PPF membership totalled 128,000, at 31 March 2012
-
PPF on track to meet its long-term funding aims
-
But deteriorating UK pension scheme funding increases short-term risk
Despite difficult economic conditions, the Pension Protection Fund (PPF) remains in good shape to face future challenges and is confident that it can continue to look after its members’ futures. This is largely down to a robust investment performance during 2011/12.
The PPF’s annual report, published today (Monday), shows a return on invested assets of 25 per cent, as at 31 March 2012 - an excellent performance which is a result of its sophisticated liability matching strategies. This return is more than sufficient to offset the PPF’s rise in liabilities in what have been turbulent financial markets.
At the end of March 2012, the PPF had a £1.07 billion surplus over liabilities, up almost £391 million on the previous year. Its membership had increased to 128,000 people, and it was managing £11.1 billion of assets, a rise of £4.7 billion from 2010/11.
PPF Chairman, Lady Barbara Judge, said: “Our overall performance should give our members continued confidence in our commitment to provide their retirement compensation for as long as they need it.
“We cannot rest on our laurels, however. Already this year, we have seen claims on the PPF of more than £700 million – and a significant deterioration in the deficits of many of the other pension schemes that we protect. We are determined, however, that the PPF should remain strong enough to weather these storms.”
The PPF performance should be seen in the context of its objective to be financially self-sufficient by 2030, and the challenging environment for pension schemes as a whole. Today, it also published an update on its long-term funding strategy which sets out the probability of successfully achieving its 2030 target.
Chief Executive, Alan Rubenstein, said: “While we are still on course to meet our aims of being self-sufficient by 2030, the probability of achieving this fell during the year from 87 per cent to 84 per cent. Although this figure is still above our comfort level, we remain ever vigilant about events which will reduce this probability even further.
“Foremost in our minds has been the continuing global financial crisis and the adverse effect it has had on the funding positions of UK pension schemes. Increased claims on the PPF have already meant that our own funding level has fallen from 106 per cent in March 2012 to about 102 per cent and that levies are likely to rise in the short-term.”
ends
|
