UK - The Pension Protection Fund has recorded a £400m ($641.5m) surplus, compared with a £1.2bn deficit the year before, figures published today reveal.
The lifeboat fund's Annual Report and Accounts 2009/10 revealed the fund had a £400m surplus, compared with a £1.2bn deficit the year before - representing funding position increase from 88% to 103%.
The PPF said the swing into surplus was because of market and investment performance, coupled with less costly claims during the year, putting the fund's balance sheet on track to achieve its funding target for 2030 (Global Pensions; August 25, 2010).
The PPF earned a return of 15% on its invested assets during the year, while its investment portfolio grew from £2.9bn in 2008/09 to £4.4bn in 2009/10.
PPF chief executive Alan Rubenstein (pictured) said: "The significant improvement in our funding is clearly welcome and reinforces our view that the PPF, and the protection system of which we are part, is sound. But I would stress that the PPF is not a short-term undertaking which why this change must be seen in context of our aim to become financially self-sufficient by 2030."
Elsewhere, the report revealed the total amount of PPF compensation paid out during 2009/10 was almost £82m and it received £1.2bn from levy receipts and from transferring the assets of 150 schemes during the year.
Rubenstien added: "Delivering on our long-term funding strategy is essential. In the end, that is the way we will provide reassurance to the millions of people whose pensions we protect that we can meet our long-term obligations and that their compensation, now and in the future, is safe in our hands."
The National Association of Pension Funds welcomed the PPF's figures.
NAPF chief executive Joanne Segars said: "It is important that the PPF has a foundation of sound funding, and the move to a surplus is welcome. Taken together with its plans for reform of the risk-based levy and its long-term funding strategy, it has been a good year for the PPF."
However, Segars warned in the long term, the PPF must strike the right balance between being robustly funded and avoiding excessive burdens on pension schemes.
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