The Pension Protection Fund (PPF) has revealed that it had a funding level of 109.6% and a £1.8bn surplus at the end of 2012/13.

According to the organisation's latest annual report, the PPF said it was 87% confident of meeting its target of being financially self-sufficient by 2030, which is an increase from 84% at 31 March 2012.

Despite the good news, the PPF admitted that risk remains as there was a record number of claims during the year.

PPF chairman, Lady Barbara Judge, said: "We remain firmly on our glide path to financial self-sufficiency in 2030. During 2012/13, we recorded another year of rapid growth, both in the numbers of members benefiting from our protection and the amount of assets we now have under management.

"Our focus during the year was to reassure our members by managing our growth effectively, meeting the continuing challenge of turbulent markets and dealing with claims totalling more than £1bn - a record for the PPF."

During the year, the PPF's investment strategy delivered an overall return of 11.1%; its assets grew from £11.1bn at 31 March 2012 to £14.9bn at 31 March 2013.

During 2012/12, 43,904 people transferred to the PPF, making a total of 172,018 people who have transferred since the PPF began.

More than £331m was paid out in compensation in 2012/13 out of an overall total of £793m since 2005.

At the end of 2013, there were 223 schemes in the PPF assessment period with assets of £5bn and liabilities of £6.5bn.

Lady Judge said: "The risks we face as an organisation remain high. As well as a record year for claims, we saw pension scheme funding worsen during 2012/13 and, although long bond yields have recovered a little since then, scheme funding remains at low levels.

"However, despite notable claims since March 2013, we remain financially strong and the probability of meeting our 2030 target remains broadly the same. Our 2030 funding target is a key milestone for the PPF so staying on track to hit that target will be of great reassurance to both our levy payers and members."

First published 29.10.2013

monique_simpson@wilmington.co.uk