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Today we've published our Annual Report 2022/23. Our Chief Executive, Oliver Morley, shares his reflections on the financial year. 

As we mark the end of another eventful year, I am pleased to report that we’ve been successful in achieving our objectives for 2022/23. Despite all the challenges we’ve seen over the year, including economic and market turbulence, we’ve continued to deliver on our mission, move forward with our Strategic Plan and meet our goals.

It was a pleasure to see our teams recognised for their outstanding work this year. The PPF was named joint Best UK Pension Fund at the IPE Awards, where the judges highlighted our commitment to responsible investment. Our Chief Investment Officer was also recognised for Efforts in ESG at the CIO’s Industry Innovation Awards 2022. ESG is critical to our mission and risk management, as we set out in our sustainability strategy.

We’ve also maintained our excellent customer service, with 98 per cent member satisfaction and 96 per cent for levy payers, and both our member and levy customer service teams retaining their ServiceMark accreditation. Our Member Services team work extremely hard to support members and we were proud to hear they’d won the Pensions Administration award at the Pensions Age Awards for the third time. 

We published our Funding Strategy Review in the autumn, in which we redefined our funding objective now that we’ve entered a maturing phase from a position of significant financial strength. Because of this, we’ve established a new investment framework, with a matching portfolio and a growth portfolio to align with the separate funding requirements. We’ve also been able to halve the PPF levy in 2023/24. It is excellent news that as a result of our strong financial position, and the current level of perceived risk posed to the PPF, we’ve been able to reduce the levy while ensuring a positive and secure outcome for our current and future members. Levy payers welcomed this as a time when there are significant financial pressures on employers.

Last September, when interest rates rose rapidly after the mini-Budget, many pension schemes had to liquidate assets in order to fund their liability-driven investment strategies. The cycle of increasing rates necessitated an intervention from the Bank of England. Fortunately, we did not have a liquidity issue and were well prepared for such a scenario. We weren’t in any danger of having to sell assets to meet collateral calls, so the impact on our Fund was limited and we protected our reserves. 

This was possible because our tried and tested liability-driven investment (LDI) strategy performed exactly as it should. The situation was a clear validation of our in-house operating model. In many ways, the events of the year have once again proved that our model works and our capabilities are strong, even in tough times.

Markets have been challenging for many asset classes we hold, but we have delivered a healthy return on our growth portfolio over the year, which is above the benchmark we use to measure our performance against other funds. 

I would like to thank all our employees for their dedication to the success of the PPF, working together to keep delivering on behalf of our members and stakeholders. I’d also like to extend my thanks to the Executive Committee, and particularly to Lisa McCrory, who has stepped down as Chief Finance Officer and Chief Actuary. Lisa joined us as an actuary in 2009 and her impact has grown significantly since then. Her advice to the Board has been invaluable and she led the recent work to evolve our long-term funding strategy. I look forward to working with Shalin Bhagwan, whom we’ve recently welcomed as Chief Actuary. He brings extensive pensions, actuarial and investment experience, having advised some of the UK’s largest pension funds. I am also delighted that Dana Grey was appointed Chief Risk Officer in December after previously stepping into the role on an interim basis. 

Together with everyone at the PPF, I look forward to building on our success to date and continuing to protect and serve our members.

Oliver Morley is our CEO