The aggregate funding position for the 87 funds in the Local Government Pension Scheme (LGPS) improved further in October as gilt yields continued to rise, Isio’s Low-Risk Funding Index has revealed.

The tracker showed that the aggregate LGPS funding position stood at 108 per cent as at 31 October, after an increase in UK Government bond yields reduced the value of low-risk liabilities, partially offset by small reductions to asset values.

For the first time, the results for each of the 87 participating funds were also released on a named basis, allowing funds to compare their relative funding positions.

Of the 87 participating funds, 55 had funding levels of 100 per cent or higher, with levels ranging from 67 per cent to 157 per cent funded.

Isio highlighted the results as evidence that funding levels for LGPS funds and their employers remained consistently much higher than 31 March 2022 levels, which were used to set funding and investment strategies that may no longer be appropriate under current conditions.

The analysis also included the comparative position as at the previous actuarial valuation date of 31 March 2022, demonstrating the significant fund-specific improvements when assessing liabilities on a low-risk funding basis.

Given this, the group repeated its call for an "urgent" review of the LGPS employer contribution rate, pointing out that many employers participating in the LGPS in Scotland continue to be offered contribution rate reductions as part of the 31 March 2023 valuations.

Isio partner and public services leader, Steve Simkins, said: “Employers participating in the LGPS continue to struggle to meet ongoing costs and their excessive pensions contributions represent a large proportion of these costs.

“Whilst employers in Scotland are being offered immediate reductions as part of their 2023 actuarial valuation exercise, those in England and Wales are yet to see similar widespread action taken meaning that their contributions will continue until 2026.

“The Autumn Statement failed to provide local authorities with additional funding, further strengthening the case for a review of pensions contributions as funding levels continue to rise as essential local services face reduced funding and/or closure.

“We urge the Department for Levelling Up, Housing and Communities and the LGPS Scheme Advisory Board, and their Surpluses Working Group, to consider the challenges faced by local authorities and the opportunities available to help.

“The results demonstrate the significant changes in market conditions since the last actuarial valuation of 31 March 2022 and the opportunities available to offer flexibility to their employers who are struggling financially.”

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