The LGPS is the 5th largest pension scheme in the world in terms of assets under management, and the largest occupational pension scheme in the UK in terms of scheme membership.
It is important to all its members, employers, and the Government; that formal mechanisms exist to measure, report, assess and benchmark the performance of the LGPS over different time periods; and in relation to other equivalent large pension schemes.
This page describes the performance reporting framework of the LGPS. It summarises the LGPS statutory reporting requirements and reporting guidance issued to LGPS pension funds, and the organisational relationships and roles of the main bodies involved in delivering the reporting framework.
The performance reporting framework can be subdivided into:
Individual fund level
a) statutory triennial (3 yearly) (actuarial valuation) reporting
b) statutory annual reporting
Overall scheme level
a) summary annual report and key performance indicator statistics
Organisational relationships and roles and Laws, Regulation and Guidance set out the:
a) organisational relationships and roles of the main bodies involved in the delivery of the overall performance reporting framework
b) key regulations and supporting technical guidance that inform the reporting framework
Some of the guidance is annually or periodically reviewed, updated and refreshed to ensure it is up to date, fit for purpose, and meets the needs of its stakeholders that includes the LGPS Government sponsors, employers, members, pensions & investment media, and other interested parties.
The aim of the LGPS Advisory Board is to provide a ‘bona fide’ single information source for all LGPS stakeholders on the:
a) “general health” of the LGPS nationally
b) “specific health” of each LGPS fund relative to other LGPS funds
The following reports can be viewed and downloaded from the LGPS Advisory Board:
a) an overall annual report for the whole LGPS. It will be published annually.
b) the triennial actuarial valuation reports for each LGPS fund. The next triennial actuarial valuation reports will be available in 2016-17.
c) the annual report and audited financial statements for the 91 LGPS pension funds.
These are published annually.
The LGPS annual reports will enable stakeholders to assess, benchmark, and track the health of the LGPS over various time periods.
|Bodies & Roles||Law, regulations, statutory guidance||Technical Guidance||Data collation||Reporting||Performance Assessment||Performance Benchmarking|
|LGPS Administering Authorities||Y||Y||Y||Y|
|CIPFA pensions panel||Y|
|ACA - actuaries||Y||Y||Y|
* Legislation passed by Parliament will have regard to requirements of the European Union, in particular the implications of the 2003 Directive on Institutions for Occupational Retirement Provision. Although there is no formal role within the LGPS for the Welsh Assembly, consideration will need to be given to any changes to the make up of local authorities brought about by the Welsh Assembly in the future.
a) Statutory triennial reporting
|Public Services Pensions Act (PSPA)||
Clause 11 - ValuationsScheme regulations for a public service pension scheme must provide for actuarial valuations to be made of the scheme. Such a valuation is to be carried out in accordance with Treasury directions. Treasury directions under may in particular specify how and when a valuation is to be carried out; the time in relation to which a valuation is to be carried out; the data, methodology and assumptions to be used in a valuation; the matters to be covered by a valuation; the period within which any changes to the employer contribution rate must take effect following a valuation. Treasury directions and variations and revocations of such directions, may only be made after the Treasury has consulted the Government Actuary.
Clause 13 - Employer contributions in funded schemesScheme regulations for defined benefits schemes must provide for the rate of employer contributions to be set at an appropriate level to ensure the solvency of the pension fund, and the long-term cost-efficiency of the scheme, so far as relating to the pension fund. Scheme regulations must require actuarial valuations of the pension fund. Where an actuarial valuation has taken place, a person appointed by the responsible authority is to report on whether the following aims are achieved the valuation is in accordance with the scheme regulation; the valuation has been carried out in a way which is not inconsistent with other valuations; the rate of employer contributions has been set. A report must be published; and a copy must be sent to the scheme manager and (if different) the responsible authority. If a report under states that, in the view of the person making the report, any of the aims in that subsection has not been achieved the report may recommend remedial steps; the scheme manager must take such remedial steps as the scheme manager considers appropriate, and publish details of those steps and the reasons for taking them; The responsible authority may require the scheme manager to report on progress in taking remedial steps; direct the scheme manager to take such remedial steps as the responsible authority considers appropriate.
Clause 15 - Information about schemesTreasury directions may require the scheme manager or responsible authority of a scheme to publish scheme information, or provide scheme information to the Treasury. The scheme information to which Treasury directions under this section may relate to scheme accounts; information about any scheme funding, assets and liabilities; scheme membership; employer and member contribution; scheme administration and governance. Treasury directions under this section may specify how and when information is to be published or provided.
|Local Government Pension Scheme Regulations (LGPS)||
Clause 62 - Actuarial valuations of pension fundsAn administering authority must obtain an actuarial valuation of the assets and liabilities of each pension fund, and a report:
a) an actuarial valuation of the assets and liabilities of each of its pension funds as at 31st March 2016 and on 31st March in every third year afterwards;
b) a report by an actuary in respect of the valuation; and
c) a rates and adjustments certificate prepared by an actuary.
Each of those documents must be obtained before the first anniversary of the date ("the valuation date") as at which the valuation is made or such later date as the Secretary of State may agree. The report must contain a statement of the demographic assumptions used in making the valuation; and the statement must show how the assumptions relate to the events which have actually occurred in relation to members of the Scheme since the last valuation. A rates and adjustments certificate is a certificate specifying—
Clause 66 - Supply of copies of valuations, certificatesAn administering authority must publish and send copies of any valuation, report, certificate or revised certificate obtained under regulations 62 (actuarial valuations of pension funds), 64 (special circumstances where revised actuarial valuations and certificates must be obtained) or 65 (aggregate Scheme costs: revised certificates) to—
(a) the Secretary of State;
(b) each body with employees who contribute to the fund in question; and
(c) any other body which is, or may become liable to make payments to that fund.
(2) An administering authority must also send to the Secretary of State—
(a) a copy of the consolidated revenue account with which the actuary was provided under regulation 62(9); and
(b) a summary of the assets of the fund at the valuation date (unless such a summary is contained in the report under regulation 62(1)(b)).
|Department of Communities and Local Government (DCLG)||Guidance (ad hoc) or letters issued to LGPS administering authorities on triennial valuations||Periodic|
|LGPS Advisory Board||Guide to the LGPS performance reporting framework for the LGPS.||2014|
|CIPFA Pensions Panel||Guidance on undertaking triennial valuations of LGPS pension funds||tbc|
|Her Majesty Treasury – Government Actuary Department (GAD)||Guidance on the triennial valuation of public sector pension schemes.||Periodic|
|Department of Work and Pensions – The Pensions Regulator (TPR)||Guidance on best practice in triennial valuations of pension schemes||tbc|
|Office of National Statistics (ONS)||Guidance on pension scheme statistical reporting on triennial valuations||tbc|
|Association of Consulting Actuaries (ACA)||Individual LGPS actuaries guidance to LGPS administering authorities||2013|