The Shadow Scheme Advisory Board (‘the Board’) has today published its findings from the 2013 valuations undertaken over the last year in Local Government Pension Scheme (LGPS) funds in England & Wales.

Viewed on a national basis, these local fund valuations show the LGPS in England & Wales had a funding level of 79% as at 31st March 2013, an equivalent funding level as calculated during the previous valuation process in 2010. Taken together with the recently implemented LGPS 2014 pension reforms which will aid the long term affordability and sustainability of the pension scheme, the results of the 2013 valuations demonstrate the positive long term prospects for the health of the LGPS.

As a funded Scheme, the LGPS invests its assets to give a long term resource for paying pensions. The 2013 valuations show that as at 31st March 2013, across the LGPS in England and Wales, the LGPS held £180.50billion in assets. In addition, the LGPS continues to have a positive net cashflow, with more money being paid in to the Scheme as contributions than is being paid out in pensions.

However, the Board recognise that there is work to be done to ensure that the Scheme’s finances are improving and, in particular, that the Scheme is addressing the long term structural deficits that exist in some funds. To that end, work has already commenced on reviewing options for deficit management in the LGPS, and will continue in the second half of this year with a view to making recommendations to the Secretary of State for the better management of fund deficits.

The Board has published two versions of its report. A summary version outlines the key findings of the 2013 valuations and provides some brief background. A more detailed version gives a fuller overview of the 2013 valuations and provides some wider context as to a) how employer contribution rates are calculated during valuations, and b) how individual fund valuations relate to the Board cost management process which will first be undertaken in 2016. The dedicated Board web page for valuations in the LGPS, including links to the majority of the 2010 and 2013 fund valuation reports can be found here.

Both papers are also available in PDF format, the summary version here and the more detailed overview here.