The Government Actuary's Department has completed the valuation of the Local Government Pension Scheme (England and Wales) as at 31 March 2020. This was the first scheme valuation undertaken since revisions were made to the cost control mechanism, which the Government consulted on in 2021. The methodology by which this is undertaken was revised last year, which widened the cost corridor (the amount by which the scheme costs could vary from the target cost before action was taken to address it) from 2% to 3%. The process was also revised to include consideration of the wider economic situation through a new “economic check” that was introduced alongside the previously established core cost control mechanism.

The valuation has found that the core ‘cost cap cost’ of the scheme lies outside the 3% cost control mechanism corridor (3.2% below target cost). The new ‘economic cost cap cost’ of the scheme also lies outside the 3% corridor, but in the other direction (7.3% above target cost). As a result, the mechanism as a whole is not breached and the Government is not proposing to make any changes to scheme benefits. The Scheme Advisory Board will shortly be publishing the final report of the scheme cost assessment that it is required to undertake under Regulation 116 of the LGPS Regulations 2013. However, the Board has already seen the initial results and agreed that it is not minded to recommend to the Secretary of State any changes to scheme benefits through that process.