LGPS funds weather the financial downturn
Despite the global financial crisis and the fact that people are living longer, pension fund deficits as at 31 March 2010 show only a small deterioration on the 2007 position, a CIPFA survey of the 89 LGPS funds across England and Wales has shown.
Total assets rose from £130 billion to £140 billion. Increasing longevity contributed, however, to scheme liabilities rising from £140 billion to £180 billion over the same period. As a result, average scheme funding levels fell by around 6.5 per cent from 83.5 per cent to 77 per cent.
These results also take into account a reduction in liabilities due to the change from the basis of pensions indexation from the Retail Prices Index to the Consumer Prices Index. This change had the effect of reducing liabilities by around £15 billion.
Commenting on the survey results, CIPFA Pensions Panel Chair, Bob Summers said:
‘As with any set of pension scheme valuation results, this is just a snapshot at a particular point in time. From the position we were seeing at the depths of the financial downturn in 2008-09, there is good reason to view this as a “glass half full” set of results. Investment returns recovered well towards the end of the valuation period and have continued to do so through 2010-11. Funds have managed to restrict the impact on future employer contribution rates to an average increase of well under 1% across the board, helping to keep the LGPS affordable, viable and fair to taxpayers.’
Contact: Lindsay Machin / Chloe Forbes
CIPFA Press Office
t 020 7543 /5645/5787
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1. The last valuation period for Local Government Pension Scheme (LGPS) funds was from 2007 to 2010. The CIPFA survey is based upon the valuation results from 85 of the 89 funds across England and Wales. Scottish LGPS funds operate on a different valuation cycle and are therefore excluded.
2. The key findings from the survey are:
Average funding level as at 31 March 2010
Average employer contributions 2010/11
Average employer contributions 2013/14
County Funds (including Environment Agency)
Metropolitan area funds
London funds (including London Pension Fund Authority)
Welsh pension funds
3. About CIPFA
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