The total membership of the LGPS grew by 134,000 (2.5%) to 5.3m members in 2016 from 5.2m in 2015. There was an increase in each category of scheme membership (contributing active members (+1.5%), deferred pensioners (+3.3%), and pensioners (+2.9%).
The 1.5% (29,000) increase in active membership between 2015 and 2016 compares with a 2.7% (50,000) increase between 2014 and 2015. The lower level of new entrants compared with 2015 (but higher than 2013) was due to the automatic enrolment staging dates for LGPS employers being phased in during 2014/2015. This trend continued in 2016, albeit to a lesser extent, as the very smallest LGPS employers begin to auto-enrol members.
The scheme remained a near nuetral cash-flow position in 2016. Contribution income lessen by £227m and was £46m lower than benefit outgoings.
The total number of LGPS employers in 2016 was over 13,000 as compared with 11,801 for 2015. Further details of the scheme membership and scheme employers can be found here.
The total assets of the LGPS remained at £217bn (change of 0.0%) during 2016. The net investment return on these assets (after fees) as at 31 March 2016 was +0.1% compared with +12.1% in 2015. The 2016 figure reflecting less favourable financial market conditions than in 2015.
LGPS assets were invested in pooled investment vehicles (43.7%), public equities (34.7%), fixed interest/index linked (7.5%), property (7.8%), other asset classes (6.5%). Between 2015 and 2016 the main shifts in asset allocation were -2.2% less equities and +0.8% more pooled investment vehicles; Fixed interest securities (-0.1%), cash deposits (0.0%) deriviatives (0.2%), and property (0.3%).
Due to the differing investment strategies adopted by each LGPS fund to specifically meet their liabilities it is not appropriate to just compare them against each other on net return on investment basis. However charting the 2014 and 2013 returns fund by fund suggests that the distribution of returns is not random, suggesting a relationship between the risk taken and financial return achieved, relative to the allocation to public equities and fixed income.
Further details of the LGPS asset allocation and amount directly invested in securities (fixed and index-linked), equities (UK and overseas), property (pooled and direct), plus pooled investment vehicles (PIVs) and other investment categories have been analysed and charted and can be found here. Also the LGPS investment performance such as average returns by each asset class set against relevant market indices, and in addition, the comparison against a corporate peer group can be found here.
The Shadow Advisory Board produced a separate summary and key messages report of the 2013 triennial valuation results and have collated the 2010 triennial valuation results for comparison. The most recent LGPS funding level for the accounting year to 31st March 2016 was 79%.
Due to the timing of the annual reports and valuations, the 2016 valuation results are available (as of April 2017) and are included on these pages for reference. The 2016 valuation results were used to set contribution rates from 1st April 2017 to 31st March 2020. As at 31st March 2016, the total asset value of the Scheme was £216 billion, compared with £181 billion as at 31st March 2013. The liabilities totalled £254 billion in aggregate, and the overall funding level was around 85%. The next full triennial valuation will be in 2019 based on the scheme membership and value of assets as at 31st March 2019.
As part of the 2019 valuation process, LGPS funds will revisit both their funding and investment strategies to ensure that these strategies together leave them appropriately placed to meet their long-term pension obligations as they fall due.
During the year, the Scheme Advisory Board has continued to develop and populate its website with news items, meeting papers and minutes, scheme guidance and other publications. Each fund has a statutory communications policy statement and the majority of funds have developed websites for the new 2014 scheme with online access for scheme members and potential scheme members, in addition to the national www.lgpsmember.org website. Hard copies of all scheme information are accessible from all of these websites.
Further information and next steps
The individual underlying annual reports and audited financial statements of each individual LGPS pension fund in England and Wales for the financial year ending 31st March 2016 (31st March 2015, 31st March 2014 and 31st March 2013) can be found in one place on this website.
The most recent triennial actuarial valuation reports of individual LGPS funds in England & Wales are as at the 31st March 2016 can also be found in one place on this website. Once available 31st March 2019 triennial valuations reports will be put on this website.
Going forward we intend to develop these two key information archives and continue to improve and develop this content and value to stakeholders of the overall scheme annual report each year.