Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • March 2012
03

UK pension funds post average 4.3% return in 2011

Open-access content Friday 30th March 2012 — updated 7.44pm, Wednesday 6th May 2020

UK pension funds recorded average returns of 4.3% last year – the third consecutive year they have posted a positive return, according to figures published by BNY Mellon yesterday.

Spreadsheet ISTOCK

30 MAR 2012 | THE ACTUARY NEWSDESK: NICK MANN

The fixed income sector provided funds with particularly strong returns - with UK gilts providing a median return of 24.8% and UK index-linked gilts returning 23.3%.

But, BNY Mellon said overseas equity returns were predominantly negative for funds, ranging from -18.4% for emerging market equities to -13.5% for European ex-UK equities. US equities made 'small gains' - recording 0.4% over the year as a whole.

As an average, overseas equities returned -8.8% overall, while Uk equities returned -3.4%. Alan Wilcock, performance and risk analytics manager at BNY Mellon Asset Servicing, said UK pension funds were particularly affected by instability in equity markets in Q3 of 2011 which was partly the result of fears over the spread of the Greek debt crisis.

'The sharp fall in stock prices during August was also at the same time the United States government's credit rating was being downgraded for the first time,' he added. Q3 saw the median fund return -13.6% for UK equities and -16.4% for overseas equities - the lowest quarterly median returns recorded by BNY Mellon for equities since the stock market downturn in Q3 2022.

Mr Wilcock explained that the stronger returns for gilts were influenced by the £75bn of quantitative easing instigated by the Bank of England in October 2011.

But, he added, 'whilst the impact of falling interest rates led to the value of these assets increasing, it will have no doubt added to the rising liabilities of UK pension funds.'

'During 2011 pension funds experienced a wide range of individual results, depending on the extent to which they were following liability-driven investment strategies. The top performing funds achieving returns above 12.4% and the bottom performing funds achieved returns below -4.2%,' he added.

BNY Mellon also highlighted a continued shift in UK pension fund investments away from equities to fixed income. While equities are still the biggest single component of funds' portfolios, its research shows allocations to equities have fallen from 72.4% to 45.3% over the past 10 years.

This article appeared in our March 2012 issue of The Actuary .
Click here to view this issue

You may also be interested in...

Tucker 'dismayed' over cost of Solvency II

The Bank of England’s deputy governor for financial stability, Paul Tucker, has expressed his ‘dismay’ at how much Solvency II is costing both the insurance regime and the Financial Services Authority.
Wednesday 14th March 2012
Open-access content

'Urgent need' for insurance accounting standard

KPMG has urged the International Accounting Standards Board to finalise a new standard for insurance accounting as soon as possible.
Friday 30th March 2012
Open-access content

Airline insurance prices 'likely to remain stable'

Despite historically low levels of airline insurance claims last year, continuing high risk in the industry means prices are likely to remain stable for most airline insurance programmes, according to Aon Risk Solutions.
Friday 30th March 2012
Open-access content
US flag ISTOCK

Record deficit for 100 largest US pension funds

The 100 largest corporate pension schemes in the United States posted a record funding deficit of $326.8bn last year - $94.7bn more than in 2010, according to figures published by Milliman.
Friday 30th March 2012
Open-access content
ta filler

Pensioners should 'stop whinging' about 'Granny Tax'

Broadstone Pensions and Investments has said complaints from pensioners about Chancellor George Osborne's decision to freeze the personal allowance for over-65s next year are unjustified.
Friday 23rd March 2012
Open-access content
2

'Detail needed' on pension fund infrastructure involvement

UK pension funds will need to see more detail on government plans to involve them in funding infrastructure projects, Mercer said today.
Wednesday 21st March 2012
Open-access content

Latest from Investment

KV

Liability-driven investments: new landscape

What now for liability-driven investments, after last year’s crash in the market? Pensions experts Rakesh Girdharlal and Moiz Khan say it should lead to a more balanced approach
Wednesday 1st February 2023
Open-access content
cj

Natural capital investing

Chris Howells and Andrew Dreaneen discuss how today’s investments in natural capital profit portfolios as well as the planet and humanity
Wednesday 1st February 2023
Open-access content
t

Options open on making portfolios more climate-friendly

Michael Sher sets out the option savailable to investors who are looking to improve their portfolios’ climate credentials
Wednesday 2nd November 2022
Open-access content

Latest from Position

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
2

Expert advice

This edition of the magazine focuses on data science and its applications, which will be a recurring theme for the IFoA.
Friday 28th February 2020
Open-access content
2

Tesla sparks fears of insurance market overhaul

That is according to a new report from Moody's, which highlights how Tesla has already started offering premiums that are up to 30% cheaper than those of mainstream insurers.
Friday 14th February 2020
Open-access content

Latest from March 2012

2

Insurers welcome Supreme Court 'clarity' on asbestos claims

Insurance companies have welcomed the ‘clarity’ provided by yesterday's Supreme Court ruling that the insurer on cover when a claimant is exposed to asbestos is liable to pay compensation if they develop the cancer mesothelioma.
Thursday 29th March 2012
Open-access content
2

Cole returns to Aon Hewitt

Aon Hewitt has announced the return of Sion Cole to its UK investment consulting practice as a senior member of the team.
Thursday 29th March 2012
Open-access content
2

UK greenhouse gas emissions fall by 7% in 2011

UK emissions of the six main greenhouse gases fell by 7% between 2010 and 2011, according to figures published by the Department of energy and climate change today.
Thursday 29th March 2012
Open-access content

Latest from formbuilder_item_removed

2

Implementing IFRS 17 Discount Curves: Theoretical and Practical Challenges

The International Financial Reporting Standard (IFRS) 17 requires liability cash flows to be discounted at rates that reflect the characteristics of the cash flows, including their liquidity
Tuesday 3rd September 2019
Open-access content
2

Profit Emergence Under IFRS 9 and IFRS 17: The impact of choice of liability discount rate

With the IFRS 17 accounting standard, insurers need to understand the patterns of profit emergence that arise under the standard, and how current business and methodology decisions affect such patterns.
Wednesday 10th July 2019
Open-access content
2

Whitepaper: Aggregation and diversification of the IFRS 17 Risk Adjustment

This paper forms part of a series of high-level papers designed to provide an introduction to different features of the risk adjustment that should be considered in advance of implementation.
Tuesday 29th January 2019
Open-access content

Latest from no_opening_image

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
web_p24_cat-and-fish_iStock-483454069.png

Sensitivity analysis: swimming lessons

Silvana Pesenti, Alberto Bettini, Pietro Millossovich and Andreas Tsanakas present their alternative approach to sensitivity analysis
Wednesday 4th March 2020
Open-access content
ta

IFoA adjudication panel: Mr Jack Wicks, student

On 30 October 2019 the Adjudication Panel considered an allegation of misconduct against Mr Jack Wicks (the respondent).
Friday 28th February 2020
Open-access content

Latest from missing_authorDate_strap_details

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
web_p24_cat-and-fish_iStock-483454069.png

Sensitivity analysis: swimming lessons

Silvana Pesenti, Alberto Bettini, Pietro Millossovich and Andreas Tsanakas present their alternative approach to sensitivity analysis
Wednesday 4th March 2020
Open-access content
OCT-2019.jpg

10

October 2019 archive + digital edition
Wednesday 9th October 2019
Open-access content

Latest from 03

2

Insurers welcome Supreme Court 'clarity' on asbestos claims

Insurance companies have welcomed the ‘clarity’ provided by yesterday's Supreme Court ruling that the insurer on cover when a claimant is exposed to asbestos is liable to pay compensation if they develop the cancer mesothelioma.
Thursday 29th March 2012
Open-access content
2

Cole returns to Aon Hewitt

Aon Hewitt has announced the return of Sion Cole to its UK investment consulting practice as a senior member of the team.
Thursday 29th March 2012
Open-access content
2

UK greenhouse gas emissions fall by 7% in 2011

UK emissions of the six main greenhouse gases fell by 7% between 2010 and 2011, according to figures published by the Department of energy and climate change today.
Thursday 29th March 2012
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Actuarial Contract Opportunities - Life Insurance

United Kingdom, Ireland and Remote
Competitive
Reference
148599

Pricing Manager (Mid-Corp)

London (Central)
£75000.00 - £90000.00 per annum
Reference
148749

Head of Insurance Pricing Risk

London (Central)
£100000.00 - £130000.00 per annum
Reference
148748
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ