Agenda item

This report summarises the results provided by the Government Actuary’s Department (GAD) of their review under Section 13 of the Public Service Pensions Act 2013 of LGPS fund valuations as at 31 March 2022.

The Head of Pensions and Treasury introduced the item and explained that the Government Actuary Department report was conducted under section 13 of the Public Service Pensions Act 2013. The Head of Pensions and Treasury informed the Committee that the report was essentially a health check of the 87 LGPS funds, to ensure that valuations were compliant with regulations, showed consistency and it was also a check on the solvency and long-term cost efficiency of the scheme.

The Head of Pensions and Treasury stated that the Government Actuary Department tried to standardise the assumptions that were applied across the LGPS funds as all the actuaries used varying assumptions when they did valuations.

The Head of Pensions and Treasury stated that the aggregate funding position, under the Government Actuary Department’s assumptions, came out as 119% funded, which was considered an excellent result.

The Head of Pensions and Treasury explained that there were three recommendations from the Government Actuary Department, the first recommendation was in relation to greater consistency; the second recommendation was in relation to emerging issues and greater consistency on climate risk and the third recommendation was in relation to more guidance being provided by the Scheme Advisory Board (SAB) for funds which were in surplus.

The Head of Pensions and Treasury informed the Committee that Croydon's results for 2022 on the SAB standard basis, the funding position was just under 110% funded which would place Croydon 58th in a comparison amongst the 87 LGPS funds. The Head of Pensions and Treasury stated that in 2016 the funding position was 81% funded which placed Croydon at 81st of the 87 LGPS funds, this showed that there had been demonstrable progress made by the fund.

The Head of Pensions and Treasury explained that the Fund had been given a green rating on solvency measures, the only slight issue was with the Fund’s long term efficiency measures where it was given a white rating was an advisory flag. The Head of Pensions and Treasury stated that his was due to the contribution rate decreasing mid valuation. 

In response to questions from Members officers informed the Committee that:

• There were four main actuarial firms in the LGPS and officers were unaware of them moving towards a more standardised service.
• Most LGPS funds used the same actuary as Croydon.
• Officers believed that it was not advisable that every fund used the same actuary as each fund had a different maturity profile and it may also lead to capacity issues for the actuary.
• Officers were looking at collaboration with other London funds in view of the call for evidence that the government had requested and to reduce costs, so if it could save the fund money on the actuarial side then it would be considered.
• The Government Actuary Department report was a health check to make sure that the Fund was consistent with the other LGPS funds. If there any major flags raised then officers would be concerned, however, following conversations with the actuary they had no issues with anything that came out of the report.

Resolved:

1.1    To consider and note the provided by the Government Actuary’s Department of their review under Section 13 of the Public Service Pensions Act 2013 of LGPS fund valuations as of 31 March 2022.