The funding position of the Social Housing Pension Scheme (SHPS) has improved "significantly" despite market volatility, with the deficit falling by £870m (over 55 per cent) from 2020, standing at £690m on 30 September 2023.

SHPS is a multi-employer DB and DC scheme managed for over 300 sponsoring employers by TPT Retirement Solutions.

The 2023 funding position was ahead of the previously set target, leading to a 12 per cent reduction in deficit contributions being paid into the scheme from April 2025.

Following a consultation managed by TPT, the SHPS Employer Committee, and the SHPS Scheme Committee, an agreement was reached on the funding position of the scheme and the contributions to be made by employers going forward.

"The agreement combines a prudent funding approach, to protect member benefits and the long-term funding of the scheme, with a significant reduction in the total deficit contributions being paid to the scheme," TPT stated.

"Affordability has been a key focus of discussions between the committees, given a backdrop of employer cash constraints and sector spending priorities, including housing safety and maintenance, and reducing carbon emissions."

The new recovery plan, replacing the 2021 plan, will reduce employer deficit contributions to the scheme.

In addition to lower deficit contributions, the contributions will increase at the lower rate of 2 per cent per annum, down from 5.5 per cent per annum, while keeping the recovery plan end date at 31 March 2028.

The improvement was credited to the scheme’s investment strategy and employer contributions, despite being partly offset by higher inflation and salary increases, and an adjustment made to fully allow for the government’s changes in the method of calculating RPI inflation..

TPT Retirement Solutions, who manages the SHPS, shared the positive results to scheme employers on 8 August 2024.

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