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Despite significant market volatility, the PPF's investment return in the year to 31 March 2019 was 5.2 per cent and its assets under management grew from £30 billion to £32 billion.

The PPF remains on course to reach its funding objective, with an 89 per cent probability of success. The PPF’s reserves, which we hold to fund future claims, decreased from £6.7 billion to £6.1 billion as a result of the liabilities brought by the Kodak Pension Plan No.2 (KPP2), the largest claim on the PPF to date. This has had the effect of reducing the funding ratio by 4.2 percentage points to 118.6 per cent.  

Andy McKinnon, Chief Financial Officer, PPF, said: “Our reserves mean that we currently have £6.1 billion over and above what we need to pay our current members and their dependants for the rest of their lives. We need these reserves to cover future claims, and we had anticipated the KPP2 claim. But despite having a buffer we are not complacent. Our biggest risk is the funding level of the schemes we protect and scheme deficits remain high.”

As well as beating its targeted three-year investment returns, during 2018/19 the PPF continued its commitment to providing excellent customer service. It successfully insourced Financial Assistance Scheme (FAS) member services, launched a new website and achieved high member satisfaction scores, averaging 97 per cent.

Oliver Morley, Chief Executive, PPF, said: “The 10.4 million members of defined benefit pension schemes can be reassured of our protection. We now have around 400,000 members, and a further 150,000 members of schemes in PPF assessment. Our steady investment and funding approach over the coming years will help us to make sure we can provide a secure retirement for all our current and future members. 

“Over the coming years we will continue to provide a valuable service for our members, to maximise value for our levy payers, and to play a worthwhile role in our community as well as the industry. We expect challenging times ahead but we are confident our funding strategy is on course to see us through them.” 

Read the full report here