On behalf of the Scheme Advisory Board I am delighted to be able to present the fifth Annual Report for the Local Government Pension Scheme (LGPS) in England and Wales. The LGPS is one of the largest defined benefit (DB) schemes in the world and is the largest DB scheme in England and Wales, with over 14,000 employers, 5.6m members and assets of £263bn.
The aim of this Annual Report is to provide a single source of information about the status of the LGPS for its members, employers, and other stakeholders. Continually improving key information about the Scheme as a whole is one of the top priorities of the Board. This report aggregates information supplied in the 90 fund annual reports, as at 31st March 2017.
To navigate the Annual Report, please use the menu to the right of this page, or the hyperlinks.
Here are some key LGPS highlights for 2017:
- The total membership of the LGPS grew by 394,000 (6.9%) to 5.6m members in 2017 from 5.2m in 2016.
- The total assets of the LGPS increased to £263bn (a change of 21.2%). These assets were invested in pooled investment vehicles (52%), public equities (32%), bonds (7%), direct property (3%), as well as other asset classes (6%).
- The Local Authority return on investment over 2016/2017 was 19.5%. This was reflective of the better market conditions during the year and set against the UK Return of 22%.
- The scheme maintained a positive cash-flow position overall. Scheme income was lower than total scheme outgoings by £484m; this was excluding investment income, however.
- The funds all received unqualified external financial audit certificates from the Scheme's external statutory auditors.
- Over 1.6m pensioners were paid over the year. Fewer than 39 formal complaints about scheme benefit administration were determined and less than 13% were upheld by the Pensions Ombudsman. Overall the LGPS has had relatively few upheld complaints.
As at the 31st March 2016, the LGPS liabilities were estimated at £254bn indicating an overall funding level of 85%. During 2016 the Board has been actively developing proposals to further tackle the estimated funding deficit of £37bn (£47bn in 2013) to improve the sustainability of the LGPS and its future funding levels. The next triennial valuation of the LGPS will be as at 31st March 2019.
As we move into the 2017/2018 reporting period, and the LGPS investment pools are being established, the Scheme Advisory Board are working with CIPFA and other stakeholders to ensure that the reporting of investments remains transparent at all levels within the Scheme.
I would be pleased to hear your views on this our fifth Annual Report (these should be sent to Liam Robson). The Board is keen to ensure we add to the Report and that the work underlying our compilation and analysis is ultimately recognised through UK, EU and global awards for excellence.
Cllr Roger Phillips
Chair of the LGPS Advisory Board