GAD report shows LGPS in strong position

The Government Actuary’s Department (GAD) review of actuarial valuations for the Local Government Pension Scheme, England and Wales, as at 31 March 2018, found that the LGPS is in a strong financial position.

In a report issued at the end of September, the GAD said funds have made significant progress since 2013. The total assets of the LGPS grew from £180 billion to £217 billion, with the aggregate funding level up from 79% to 85%. According to the GAD report, the improved funding is due in part to significant financial contributions from LGPS employers, as well as better than expected returns on assets.

On a best estimate basis, the LGPS had an aggregate funding surplus of 106% at the end of March 2016, with around 60 out of 91 funds in surplus. The GAD said that this meant that, on average, there is a greater than 50% chance that existing assets will be sufficient to cover benefits in respect of accrued service when they fall due.