Pensions life boat shows no signs of sinking

Helen Morrissey, pensions specialist at Royal London, applauded the Pension Protection Fund (PFF) after its annual report highlighted its continued success, despite having to recently take on the pension schemes of large corporates such as Carillion, Hoover and Toys R’Us with deficits of more than £1.2bn. 

Commenting on the last 12 months, she said: "Such activity could have caused the PPF to come under major stress it is extremely positive to see its position strengthen with continued growth in its funding reserves and strong investment performance.

"While the PPF’s probability of being self-sufficient by 2030 has fallen slightly from 93 per cent to 91 per cent, it is still well above its target of 88 per cent.

"While there should be no room for complacency such performance bodes well that the PPF will continue to provide much needed security for millions of pension scheme members for the long term.”

This comes as the PPF’s annual report, which was published on Friday (13 July) outlined how 46 schemes were transferred to the PPF with more than 65,000 people in 2017 to 2018.

The 89-page report also outlined how its member numbers rose to 236,000, and it paid an extra £63m in benefits.

Arnold Wagner, chairman of the PPF, said: "The past year has been one of significant change, both for us at the PPF and for the wider pensions world.

"Despite our strong performance and our confidence for the future, we never assume that what has made us successful so far is guaranteed to do so forever. Improvements in the funding status of DB pension schemes over the past year do not detract from the significance of a large net deficit that still exists in our universe of schemes. And the surrounding environment remains uncertain in many respects.

"So we continue to test our assumptions and models in order to ensure our analyses are up to date. And we make timely and effective decisions to keep us on track in fulfilling our mission.”

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