Income on the rise in LGPS as value hits £178bn

The market value of Local Government Pension Scheme funds in England at the end of 2013/14 rose by 6.3% from the previous year to reach £178bn.
Figures released by the Department for Communities and Local Government this week demonstrated a rise of 83% on March 2009.
Overall income during 2013-14 was £11.6 billion, an increase of £534 million (4.8%) when compared to 2012-13.
The biggest contributor to the rise in income was through employer contributions, which increased by £298m over the period. Income from employees’ contributions rose by £42m, a rise of 1.8%.
Both figures reflect an increase in the number of members of the LGPS by 83,000, up 5.2% on the previous year to 1.67m. This followed a much smaller increase last year, which reversed falling numbers from the peak of 1.69m members in 2008-09.
Jeff Houston, head of pensions at the Local Government Association told Room 151: “It is good to see the recovery in membership seems to be holding.
“Much of that will no doubt be down to the government’s introduction of auto-enrolment for employees.”
He added that he hoped that the introduction of a similar scheme allowing 50% contributions from employees, introduced in April 2014, would lead to similar progress next year.
In 2013-14, 68% of LGPS income came from employers’ and employees’ contributions whilst income from investments provided 27% of the total.
LGPS investment income rose by £181m to £3.2bn, a jump of 6.1% over the period.
Costs charged to the funds rose by 16.2%, in 2013-14 to £572 million, and costs accounted for 6.4% of all expenditure, up from 5.8% the previous year.
Houston said: “Much of that rise will be to do with performance fees. Where you have active managers of funds, any increase in investment values are likely to be accompanied by increases in fees.”
Figures released for Wales this week showed a rise in market value of funds of 7% over the year to £11.8bn – an increase of 92% on March 2009. Membership in Wales rose by 7.7% over the past year.