The Pension Protection Fund (PPF) is 90% likely of being financially self-sufficient by 2030, the lifeboat fund said as it reported a £2.4bn and a funding ratio of 112.5%.
The PPF said that its investment strategy contributed to its performance, where the assets grew to £16.3bn at 31 March 2014 from £14.9bn last year, and the assets outperformed the PPF's liability benchmark by 2.9%.
The figures revealed in the PPF's annual report and accounts also revealed that since 2005, it has paid out a total of £1.2bn in compensation, of which in the "record year" of 2013/14 £445m was paid out.
Lady Barbara Judge, PPF chairman, said: "In a year that recorded continued achievement and significant growth for the PPF our annual report and accounts demonstrates that, with a surplus of £2.4bn, we remain firmly on track to meet our 2030 financial goal of self-sufficiency.
"The pensions lifeboat continues to sail smoothly on towards its goal.
"Whilst there are signs that the upward trend in the economy will continue and we expect further improvement in our risk profile, there are many challenges remaining. Our focus continues to be on maintaining stability in the face of ongoing uncertainty."
The annual report showed that in 2013/14, 27,109 people transferred to the PPF, making a total of 199,127 deferred and active members.
At the end of 2013/14, the PPF said that there were 160 schemes in the assessment period with assets of £5.3bn and potential liabilities of £6.5bn to the PPF.
Alan Rubenstein, PPF chief executive, said: "Our financial position ensures we are robust in the face of unforeseen risks."
"We are working harder than ever to ensure the PPF operates as efficiently as possible and to maximise the benefits of the Fund's increasing scale.
"By making our assets and levy collections work effectively to continue to offer value for money for our levy payers and ensure our members can remain confident in the protection we offer them."
Regarding the news that the PPF is on track to being financially self-sufficient, CBI head of pensions Jim Bligh said: "This is good news as the PPF levy currently represents a huge expenditure for many businesses, who are already hampered by legacy deficits from their defined benefit (DB) schemes.
"It's essential that the PPF maximises its healthy financial performance to ensure that businesses whose levy will increase due to the new system for scoring credit risk – in some cases by up to 10 times their current levy amount – will benefit from a long transition time. This will ensure they can still invest, repair their deficits and contribute to this lifeboat pension fund."
First published 23.07.2014
monique_simpson@wilmington.co.uk
