UK Pension Funds Post Strongest Returns for Four Years

Pacific Ex Japan Equities and Emerging Market Equities strongest performers of 2009 posting returns of 50.7% and 58.9% respectively

LONDON, March 30, 2010 - New research from BNY Mellon Asset Servicing reveals that the average UK
pension fund achieved a weighted average return of 14.4% for the year ending
31 December 2009 - this is the best return BNY Mellon has recorded since
2005. This was a real return of 12.0% when measured against the Retail Price
Index for 2009 and 12.9% when measured against the National Average Earnings
Index.

This is a strong turnabout in annual performance of UK pension funds over
the last 12 months. In 2008, the average UK pension fund achieved a weighted
average return of -13.6% for the year ending 31 December 2008 - the first
time that BNY Mellon has recorded negative yearly returns for UK pension
funds since the three-year downturn at the beginning of the decade.

Results were also back in the black over a three-year period to 31
December 2009 with an average return of 1.7% per annum. However, over this
period pension funds failed to make gains against both the Retail Prices
Index and the National Average Earnings Index.

Over the longer term, results were much more varied with funds achieving
a weighted average return of 6.3% per annum over five years to 31 December
2009. Funds made real returns over this period of 3.5% per annum against the
Retail Prices Index and 3.0% per annum against the National Average Earnings
Index. Over 10 years to 31 December 2009, the average fund posted a positive
return of 3.2% per annum which beat the Retail Prices Index, however
underperformed the National Average Earnings Index which posted 3.6% per
annum respectively.

Over the year returns were in positive territory for each of the key
equity markets with one exception. The poorest performance came from Japanese
Equities which posted the only negative equity return with -5.9%. UK Equities
posted 30.1% over the period while the strongest returns came from Pacific Ex
Japan Equities with 50.7% and Emerging Market Equities with 58.9%.

Bonds were mixed during 2009 with UK Bonds returning -1.2% and Overseas
Bonds providing -9.7%. Index-Linked Gilts performed well in comparison
returning 6.4% over the same period. Property continued to struggle with this
sector returning -5.8%.

Commenting on the results, Alan Wilcock, Performance and Risk Analytics
Manager, BNY Mellon Asset Servicing said: "Improvements in global markets in
2009 resulted in the majority of UK pension funds posting double-digit
investment returns for the year. This is the best return BNY Mellon Asset
Servicing has recorded since 2005 and marks a long coveted return in fortunes
for UK pension funds which suffered the worst annual returns for 30 years
just one year earlier."

Asset allocation trends over 1-year and 10 years

The average equity asset distributions rose from year on year from 48.8%
to 52.1%. The main beneficiary in this rise was Overseas Equity which rose
from 24.8% in 2008 to 27.5% in 2009. UK Equity rose by 0.6% from 24.0% to
24.6% during the same period.

UK Bonds fell over the year from 30.0% to 26.5%. Within this sector UK
Gilts fell the most with a reduction of 4.6%. Overseas Bonds, however,
increased slightly over the year by 0.2% to 1.7%. Cash holdings rose by 0.4%
over the year while Property holdings fell by 0.4%.

Looking at asset allocations trends over the last decade to 31 December
2009, equity holdings have fallen from 73.3% to 52.1%. Asset allocation in UK
Equity has fallen by over a half during this period from 53.0% to 24.6%.
Conversely, Overseas Equity has risen from 20.3% to 27.5%.

Meanwhile holdings in UK Bonds have more then doubled in the last 10
years from 11.3% to 26.5%. Overseas Bonds asset allocation has fallen from
4.6% to 1.7% while UK Index Linked holdings have risen from 3.7% to 11.2%.

Commenting on the changes in asset allocation trends, BNY Mellon's
Wilcock added: "Some of the long-term trends in asset allocation for UK
pension funds continued in 2009, with schemes reducing further their
allocation of UK Equity within Total Equity. Investment in corporate bonds
increased to 18.7% of assets, while exposure to UK Gilts fell to only 7.6%."

    Notes to editors
    Total Fund weighted average return for the year:

    - The weighted average return represents the total performance
      of the pension fund assets within our sample.
    - The weighted average is used in preference to the simple
      unweighted average, which takes no account of fund asset size.

The performance analysis and other information in this press release are
based on historical data and are intended for informational purposes only.
Past performance is not a guarantee of future performance. This press release
does not constitute investment advice, nor is it an offer or recommendation
of any security, investment product, service or firm.

BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of
specialised asset servicing capabilities, including custody and fund
services, securities lending, performance and analytics, and execution
services.

BNY Mellon is the corporate brand of The Bank of New York Mellon
Corporation. BNY Mellon is a global financial services company focused on
helping clients manage and service their financial assets, operating in 34
countries and serving more than 100 markets. BNY Mellon is a leading provider
of financial services for institutions, corporations and high-net-worth
individuals, providing superior asset management and wealth management, asset
servicing, issuer services, clearing services and treasury services through a
worldwide client-focused team. It has $22.3 trillion in assets under custody
and administration, $1.1 trillion in assets under management, services $12
trillion in outstanding debt and processes global payments averaging $1.6
trillion per day. Additional information is available at www.bnymellon.com.

Louisa Bartoszek of BNY Mellon Asset Servicing, +44-20-7163-2826, louisa.bartoszek at bnymellon.com