The Merseyside Pension Fund returned 6.2% over the course of its most recent financial year, outperforming its benchmark by two percentage points but falling short of peer average.
The now £6.1bn (€7.3bn) local government pension scheme (LGPS) services public sector workers in Liverpool and Wirral councils, in the north west of England.
Despite the positive performance over the 12 months to March 2014, the fund’s latest triennial valuation revealed a funding level of 76%.
Its investment performance fell below the 6.4% LGPS average, but chair of pensions committee, Pat Glasman, said the scheme operated at significantly lower risk.
“Measured on a risk-adjusted basis, the fund demonstrates a lower volatility over three years than the average LGPS, which means that it can boast a better return profile than three quarters of the schemes,” she said.
The fund’s near 10% allocation to European equities and 7% to property led the returns both performing well over 15%.
UK equities account for around a quarter of the scheme and returned 10%.
The fund has just over 15% allocated to alternatives with its second largest asset class returning 5%.
Japanese, emerging market, and Pacific-basin ex Japan equities all performed negatively, bringing down the funds performance.
Together, the three asset classes account for some 15% of the schemes assets.
Recently, the pension fund announced it was re-appointing Swiss asset manager Unigestion to manage part of its top-performing European equities assets.
In other news, the Research Machines PLC 1988 Pension Scheme has agreed a £31m buy-in with bulk annuity specialist insurer Pension Insurance Corporation (PIC).
The scheme for IT resource firm, RM, transferred £26m of fixed income assets over to PIC with the remaining premium covered by an escrow account set up between the sponsor and scheme for de-risking.
RM said £3.3m remains in the account for further bulk annuity exercises in the future.
It covers all 165 members currently drawing a pension, reducing the scheme’s longevity and inflation risk.
The buy-in represents around 9% of the scheme’s membership and 13% of liabilities.
Due to current market conditions, schemes holding UK Gilts to cover pensioner members can conduct an insurance buy-in for little to no cost.
The bulk annuity market is currently booming, making this announcement the third this week after the Unilever and Panasonic schemes announced buy-in and buyouts.