Inconsistencies and a lack of availability in the data published has hindered meaningful comparisons between individual Scottish local government schemes’ performance, according to a government report.
The Government’s Actuary Department has recommended that the 15 Scottish local authority schemes develop a basis for standardised calculations of fund valuations to enable cross-comparisons of funds.
The report also suggested that the Scottish authorities adopt standard disclosure policies at the LGPS England and Wales so their data can be comparable.
The authors of the report, government actuary Martin Clarke and Michael Scanlon, an actuary at the GAD, found that there were “presentational” and “evidential” difficulties for readers of the actuarial valuations of the schemes.
Information may be presented in different ways in different reports: for example, funding levels and sometimes information such as life expectancies are contained in some reports but not others. That meant that readers might have some difficulties in locating the information they wish to compare.
Local circumstances may merit different assumptions, for example financial assumptions are affected by the current and future planned investment strategy and different financial circumstances may lead to different levels of prudence adopted.
“However, there appears to be a strong link between the discount rate and the firm of actuarial advisers, rather than the differences reflecting the local circumstances of the funds,” the report found.
Yet the authors of the report said there had “been a big improvement in the consistency of presentation of disclosures such as employer contribution rates in the 2017 valuations, compared with the 2014 valuations.”