UK - The Pension Protection Fund has unveiled details of a long-term funding strategy which will make it financially self-sufficient by 2030.
The lifeboat fund, which supports the pension promises of insolvent employers, today published its long-term funding strategy to be fully funded within the next 20 years, with no exposure to interest rate, inflation and market risks.
It said a combination of investment returns, proceeds from the assets of schemes brought into the PPF and continuing to collect an annual levy from eligible pension schemes will help it reach its target.
PPF chief executive Alan Rubenstein (pictured) said: "We think it is important that we expose our plans so we can show how we intend to ensure we have the financial resources needed to pay existing levels of compensation to current and future members of the PPF - and become self-sufficient by the time the level of risk to the PPF from future insolvencies has reduced substantially."
The collected levies will continue to be invested alongside the assets of schemes which transfer into the PPF and its own accumulated investment returns.
The PPF said this will enable it to pay compensation, maintain stakeholder confidence in reaching its long-term funding target and allow it to continue its low-risk approach to investments.
It will also continue to work closely with The Pensions Regulator and others to reduce the level of risk in the UK's defined benefit pension schemes.
The PPF will measure its progress on an annual basis and review the objective or other areas which could affect it, such as its own investment strategy.
PPF executive director of financial risk Martin Clarke added: "It will also provide greater certainty and predictability for those who pay the pension protection levy by clearly showing how we expect to meet our liabilities as the number of levy payers and the real value of levy receipts falls over time."
The National Association of Pension Funds (NAPF) welcomed the funding plan but said the PPF must find a balance between a prudent route to self-sufficiency and an overly cautious approach which saddles firms with higher levies.
NAPF chief executive Joanne Segars added: "As the PPF admits, the switch from RPI to CPI will have a great impact on its funding strategy. That must be reflected in the levies that companies have to pay.
"Although the long-term view of self-sufficiency is welcome, vital short-term issues need to be addressed. The PPF is still working on reform of the risk-based levy, and it must get this right over the coming months."
Standard Life has increased exposure to risk assets in three out of five funds in its Active Plus and Passive Plus workplace pension ranges.
Some 48% of employers are unaware of the services or help they offer to members of their defined contribution (DC) schemes, according to Aon.
Jupiter Asset Management's Abbie Llewellyn-Waters, manager of the Jupiter Global Sustainable Equity strategy, explains why firms need to integrate ESG into their business model