The Local Government Pension Scheme is in a “strong financial position”, with total assets standing at £217bn in March 2016, according to the Government’s review of fund valuations.
The Government Actuary’s Department review said that the aggregate funding level has improved from 79% at the time of the last valuation in 2013, which measured total assets at £180bn.
Improved funding levels were due to significant financial contributions from LGPS employers, as well as better-than-expected returns on investments, the report said.
According to the report: “On our best estimate basis, the LGPS was in surplus in aggregate at 2016 (funding level approximately 106%), and around 60 of the 91 individual funds were in surplus.
“This means that we expect there is, on average, a greater than 50% chance that existing assets would be sufficient to cover benefits in respect of accrued service when they fall due.”
The report made three recommendations, including that the LGPS Advisory Board considers how to implement a standard way of presenting disclosures in all valuation reports to allow easier comparison.
It has published a draft dashboard to help the board consult stakeholders on this.
Secondly, the department recommended that the board should consider steps to achieve greater clarity and consistency in actuarial assumptions.
Lastly, it said that the board should seek a common basis for future conversions to academy status that treat future academies more consistently.
