The scheme, which has 158,000 members, accelerated its five-year risk reduction strategy by making substantial reallocations from equities into bonds and cash.
More than 64% of assets are now invested in bonds; 23% in equities; 4.9% in property; 3.8% in cash; and 1.5% in alternative investments following the exercise, which was originally planned to conclude in March 2011.
AJ Johnston, chairman of trustees, said: “Against the background of continuing volatility in investment markets and generally unfavourable economic conditions, it is pleasing to report the fund’s assets also grew by £421m last year and now stand at more than £9.8bn.”
The scheme’s total investment return over the year was 7.2%, outperforming its target of 6.1%, while its coffers were boosted with £109m after the bulk transfer of the Firsteel Group pension scheme’s assets.
The scheme’s sponsor, British Steel, changed its name to Corus in 1999. Following the acquisition of Corus in April last year, new owner Tata Steel and a syndicate of banks signed a memorandum of understanding with the scheme.
Tata Steel confirmed its support to the scheme and agreed a package to provide security against adverse circumstances. It also guaranteed employer contributions would rise from 10% to 12% until March 2009.
The firm also pledged to support the scheme’s derisking strategy with two payments of £27m over two years.
A longevity review earlier this year found that life expectancy was improving, which will be taken into account in an actuarial valuation due for completion next April.
Tom Willetts
