U.K. pension funds gained nearly 20% in 2005 despite the underfunded status of several of the country's largest pension plans, according to an estimate released today by Mellon Analytical Solutions. U.K. pension funds returned 18.2% for the year ended Dec. 31, making 2005 the third year in a row with double-digit returns.
U.K. equities, the most popular asset class among U.K. pension funds, returned 22%, Daniel Hall, publications and statistics manager, said in the news release.
"By the end of 2004, pension funds had got back to where they were at the start of the decade, in terms of fund value," Mr. Hall said in the release. "This year, they have finally started to move ahead."
For the three years ended Dec. 31, U.K. pension funds returned an estimated weighted average of 14.8% per year, keeping ahead of inflation, according to the release. The funds returned an estimated 7.7% per year on average over the 10 years ended Dec. 31.