Chief Executive's review
Oliver Morley's review of the year
Chief Finance Officer's review
Lisa McCrory reviews our financial performance
Read more from Oliver
Our strategic plan and priorities
We’re entering the third year of our Strategic Plan. Our five strategic priorities are the areas we’re focusing on to set new standards for innovation, assurance and service.
When Woolworths collapsed it was such a stressful situation, thinking that the large investment I’d made in my pension and my future might be wiped out completely.
When the PPF stepped in it was a relief to know that my investment was safe. They gave me back a sense of security.
The website has answered all the ‘little questions’ I’ve had and the Benefit Modeller is really useful and easy to use, with lots of choices.
It’s meant I haven’t had to always phone customer services but on the odd occasion I do, they’re always very helpful.
What we do and why it matters
Our purpose is to protect the future of millions of people throughout the UK who belong to defined benefit (DB) pension schemes. When these schemes fail, we’re ready to help.
We do this by paying our members, by charging a levy and by investing sustainably.
Our work has a real impact on people’s lives, so whatever we do, we strive to do it well, with integrity and with their future in mind.
Our reserves increased to £9.0 billion as of 31 March 2021, up from £5.1 billion. This means that we have £9,0 billion over and above what we estimate is needed to pay every current member and their dependents their full compensation for life. These reserves help protect us against future risks.
Read more our financial performance
We had an exceptional year of investment performance. Our total investment return in 2020/21 was 3.2 per cent, lower than in 2019/20 mainly due to the rise in gilt yields over the year. However, our extensive hedging meant that our reserves were not materially impacted by these movements.
Read more our investment performance
Across our growth assets, which make up around 60 per cent of our investment portfolio, we delivered a return of 17.6 per cent (£3.7 billion). This was a significant increase from the previous year, which was low due to extreme market volatility.
Read more our investment performance
Our funding ratio is the value of our assets divided by the amount we expect we’ll need to pay our members in future. This increased 13.9 percentage points year on year.
We currently manage £38 billion of invested assets on behalf of our members, an increase of £1.9 billion year on year.
Our probability of success (PoS) is the main way we measure our progress towards our funding target which is currently to be 110 percent funded by 2030. This increased from 83 percent at 31 March 2020, to 95 per cent on 31 March 2021.
Part of our funding comes from the levy that we collect from eligible defined benefit pension schemes.
Although 17,000 new members joined us this year, our cost per member decreased. We were able to achieve this as a result of introducing better tools and processes.
Read more about how we achieve value for money
Our actuarial liabilities are the amount we expect to need to pay members in future.
We continue to beat our target of 90 per cent customer satisfaction, with 97.7 per cent of PPF and FAS members feeling satisfied with the service they’ve received.
Read more about our service to members
‘Members in assessment’ means the number of people who could potentially join us in the next few years. These people currently belong to pension schemes that are in our assessment process.
Read more about the assessment process
How we are funded
As you can see in the chart below, we raise the money we need to pay our member benefits and running costs in four ways:
Assets from pension schemes transferred to us
The return we make on our investments
The levy we charge on eligible pension schemes
Recovered assets we secure from insolvent employers
Our ICARE values
We strive to do the best work we can do, underpinned by our values of integrity, collaboration, accountability, respect and excellence.
I remain tremendously proud of how everyone at the PPF, in every area of our work, has pulled together with an unwavering focus on what we are here to do.
Chair’s statement
Arnold Wagner, Chair of the Board, 2016-2021
Arnold Wagner stepped down as Chair of the PPF at the end of his tenure, on 30 June 2021. Here he shares his reflections on the 2020/21 year.
"This is our second annual report since the COVID-19 pandemic began. I am pleased to report that the defined benefit pension scheme members who we protect can rest assured that the PPF remains financially strong and that it can be relied upon to continue to fulfil its mission.
"This report shows the many ways in which PPF colleagues have adapted to ensure we continue to serve all our stakeholders throughout the recent crisis.
"I will highlight just a couple of points here.
"We have made some significant achievements in diversity and inclusion (D&I), becoming a Disability Confident Leader and publishing our ethnicity pay gap and ethnicity representation targets. This is a work in progress, however, everyone in the PPF should be pleased with the progress made and the commitment to not rest there.
"I’d like to congratulate Sara Protheroe, our Chief Customer Officer and Executive Director, who was awarded an OBE in 2020 for services to pensioners. This accomplishment is testament to Sara’s commitment to our members and her success in continuously improving their experience of the PPF.
"As I leave the PPF at the end of June after over 10 years on the Board, the last five as Chair a lot has changed over that decade. It's the people in the PPF who, through their passion and dedication, have made it possible for the organisation to adapt and to continue to deliver positively for all our stakeholders. They have made my time here a privilege and a pleasure. I will remember it with deep gratitude. I am delighted that Kate Jones has been appointed to become Chair and I wish her every success."
I look forward to working closely with our Board, executive team and employees to continue to protect the futures of all who depend on us.
Kate Jones
Chair of the Board, July 2021
I am proud to have the opportunity to lead the PPF through the next important phase of its evolution as we look to our future, building on the strong results delivered in the challenging 2020/21 year. On behalf of the Board I’d like to thank Arnold Wagner for his leadership and significant contribution to the PPF over the last 10 years.
Our priority remains to offer the very best protection to those who rely on us, while working with our levy payers, government, partner organisations and other critical stakeholders to constantly improve, innovate, and set new standards.
The 2021/22 financial year brings an opportunity to look ahead as we develop the strategic plan to take us forward for the next three years to ensure we can confidently deliver for those who need us now and in the future, whatever challenges they face.
Throughout my five years on the Board I have been impressed with the dedication and care shown by our employees. I look forward to working closely with our Board, executive team and employees to continue to protect the futures of all who depend on us.
