Almost half of LGPS funds expect to be over 100% funded at next triennial valuation

Nearly half (46 per cent) of Local Government Pension Scheme (LGPS) funds expect to be more than 100 per cent funded at their next triennial actuarial valuation, according to research from Alpha Real Capital.

Amidst improving funding levels, the survey found that three-quarters (75 per cent) of LGPS fund professionals ranked increasing or maintaining returns as amongst their highest priorities post-valuation.

Two-thirds (66 per cent) of respondents cited cashflow management as a high priority, while 60 per cent described their intention to de-risk/diversity away from traditional assets as one of their top priorities.

Meanwhile, around 50 per cent of professionals surveyed intended to focus on environmental, social and governance (ESG) as a priority, with ‘social impact locally and nationally’ and investing with the ‘environmental impact’ in mind scoring similarly.

Alpha noted that the period after the valuation date has seen “significant movement” in interest rates, inflation and equity markets, although it added that it was widely expected that LGPS fund balance sheets have been resilient.

“The ongoing market volatility and high levels of inflation highlights the immediate relevance of the LGPS fund priorities revealed by our survey,” commented Alpha Real Capital CEO, Phillip Rose.

“Focusing on these priorities will require assets that provide inflation protection and improve the resilience of returns, while also targeting ESG benefits.”

Alpha Real Capital client solutions, Stuart Hanson, added: “Our research shows that many LGPS fund professionals are optimistic about the valuations of their funds and have a clear view of the goals and challenges they face.

“Assuming the final valuation results align with expectations, this would represent an excellent outcome for LGPS fund professionals in what has been a very difficult period for investors.”

    Share Story:

Recent Stories


Closing the gender pension gap
Laura Blows discusses the gender pension gap with Scottish Widows head of workplace strategic relationships, Jill Henderson, in our latest Pensions Age video interview

Endgames and LDI: Lessons to be learnt
At the PLSA Annual Conference, Laura Blows spoke to State Street Global Advisors EMEA head of LDI, Jeremy Rideau, about DB endgames and LDI in the wake of the gilts crisis of two years ago

Keeping on track
In the latest Pensions Age podcast, Sophie Smith talks to Pensions Dashboards Programme (PDP) principal, Chris Curry, about the latest pensions dashboards developments, and the work still needed to stay on track
Building investments in a DC world
In the latest Pensions Age podcast, Sophie Smith talks to USS Investment Management’s head of investment product management, Naomi Clark, about the USS’ DC investments and its journey into private markets

Advertisement