The Pension Protection Fund, London, achieved a 5.2% investment return in the year ended March 31, helping to bolster assets by 6.7% to £32 billion ($40.7 billion).
The fund, which is the lifeboat for the defined benefit funds of insolvent U.K. companies, achieved a 3.2% return for the fiscal year ended March 31, 2018.
In its 2018-19 annual report and accounts, the PPF said its funded ratio fell to 118.6% as of March 31, down from 122.8.% a year ago.
The strategic asset allocation is 59.2% cash and bonds, 18.3% alternatives, 11.3% hybrid assets and 11.2% equities.
"Our reserves mean that we currently have £6.1 billion over and above what we need to pay our current members and their dependents for the rest of their lives," said Andy McKinnon, the fund's chief financial officer, in a news release. "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."
Oliver Morley, PPF CEO added in the release: "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 maximize 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," Mr. Morley said.