Any policy proposing changes to the structure or approach of one of the largest pension funds in the world should be supported by evidence, and detailed plans. The duty of the LGPS is to look after members’ interests and that is where it is fully focussed.
Zoe Alexander, Director of Policy at Pensions UK, said: “The Local Government Pension Scheme is one of the world’s most successful pension schemes, delivering pension payments to millions of workers across the country. It has consistently demonstrated financial resilience and operational stability throughout regular periods of rapid change, capitalising on economies of scale and a collaborative culture. It provides pensions on behalf of 15,000 employers and close to 7 million workers in Local Government. Those pensions are not generally large: the average sum received is around £5,000 per annum.
“The latest valuation figures show that the LGPS delivered an aggregate return of 8.9% in 2024 with average funding level of 108%. The next valuation is expected to show this position even further improved. Significant improvements in funding over this valuation cycle are already expected to result in reduced employer contributions. Any savings could be passed onto taxpayers via reductions in their council tax but these decisions are for individual councils.
“The policy of consolidation, pursued by both the last and current government, has led to considerable savings, estimated at over £1 billion. These savings are expected to accelerate as the pooling reforms proceed rapidly.
“The vast majority of LGPS investments are now carried out via FCA-authorised Pools, and from spring next year it is expected that all investments in England & Wales will be managed by these large, sophisticated vehicles. Like all significant UK pension schemes, the LGPS takes responsible investment seriously and integrates climate considerations into overall risk management.
“The LGPS also has a strong record of investing in Local areas – and we anticipate that the latest Government reforms, and the devolution Bill, to strengthen this further. It has the highest proportion of investments in domestic assets in the UK pension sector.
“Any policy proposing changes to the structure or approach of one of the largest pension funds in the world should be supported by evidence, and detailed plans. The duty of LGPS is to look after members’ interests.”
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