LGPS 79% funded according to new data
The Local Government Pension Scheme is funded to a level of 79% according to the first annual report by the LGPS Advisory Board.
The paper has been produced to aggregate information supplied in the annual reports of the 89 funds making up the LGPS, as at 31 March this year.
It revealed that overall liabilities are estimated at £227bn while overall assets are valued at £180bn, a funding deficit of £47bn. This is up from a deficit of £36.9bn in 2010, the report said, although the overall funding percentage remained steady.
The fund’s chairwoman, Joanne Segars, said: “The board is actively developing proposals to tackle the estimated funding deficit of £47bn to improve the sustainability of the LGPS and its future funding levels.”
During the year, income was £12bn, compared to outgoings of £9bn.
Investments made up more than a quarter of the income, with employer contributions making up 51% and employee contributions totalling 17.6%
During 2012/13, the average investment return on LGPS assets was 12.5% after fees.
There are 9,340 employers in the scheme across England and Wales, with 4.8m members in total. The average age of members is 47 with an average salary of £22,000.
DCLG local government minister Kris Hopkins said: “By bringing together the data from all English and Welsh funds, the Shadow Scheme Advisory Board has helped usher in a new standard of transparency for scheme members, employers and taxpayers alike.
“This will also provide a comprehensive and clear reference document for the scheme as a whole.”
Segars said that the board was now devising a suite of LGPS health indicators which will allow the scheme to be benchmarked against other large private or public pension schemes.