PPF funding level increases to 122.8%, annual results show

The Pensions Protection Fund (PPF) has increased its funding level by 1.2 per cent over the year to 122.8 per cent, despite taking on its highest total value of deficits ever recorded, its annual report has shown.

The PPF’s reserves grow by £0.6bn to £6.7bn over 2017/18, achieved while taking on scheme deficits of £1.2bn, £931m higher than the previous year, and paying member benefits of £725m, a 10 per cent increase on 2016/17.

The failure of high profile companies such as Carillion, Toys R Us and Hoover placed the largest value deficits the PPF has ever seen, and also saw 65,386 new members enter the PPF assessment.

PPF chief executive, Oliver Morley, said: ‘‘The PPF remains resilient within a volatile economic landscape, and continues to provide valuable protection for 11 million pension scheme members. This year, more than 60,000 people are better off because the PPF exists following insolvency events that affected their defined benefit pension.

“While we remain strong, we are not complacent. We remain focused on becoming more efficient and effective for our members and levy payers.’’

Further to the positive growth in its funding level, the PPF results show that it a made a 2.8 per cent investment return over the year, down from the 3.9 per cent the previous year, while the funding level decreased by 2 per cent to 91 per cent.

The PPF said that it collected £537m in levy over 2017 to 2018, a £48m decrease on the previous year.

Assets grew by £993.9m over the year, totalling £6.4bn as of 31 March 2018.

PPF chief financial officer, Andy McKinnon, commented: ‘‘Our success over the past year has come amid a backdrop of political, regulatory and economic uncertainty, so I am pleased to report that we have achieved such strong financial results.

‘‘However, there are significant risks in the pensions universe we protect. We continue to monitor these risks to ensure we can meet the needs of our members and our levy payers, and our performance over the past year reflects this.”

    Share Story:
An alternative approach
Laura Blows speaks to NEST’s CIO Mark Fawcett to discuss its investment into alternative asset classes

All change
Laura Blows speaks to PMI president Lesley Carline about how the institute is continuously adapting to cater to evolving industry requirements