Chair's Statement
On behalf of the Scheme Advisory Board, I am delighted to be able to present the twelfth Annual Report for the Local Government Pension Scheme (LGPS) in England and Wales. The LGPS is one of the largest defined benefit (DB) schemes in the world and is the largest DB scheme in England and Wales, with 15,049 active employers, 6.7m members and assets of £390bn.
The aim of this Annual Report is to provide a single source of information about the status of the LGPS for its members, employers, and other stakeholders. One of the top priorities of the Board is to continually improve key information about the Scheme as a whole. This report aggregates information supplied in the 86 fund annual reports, produced as at 31st March 2024.
Through the Compliance and Reporting Committee, the Board updated and issued new statutory Annual Report guidance for funds to follow in compiling those annual reports. We are endeavouring to follow the structure of that guidance in this report also. To navigate the Scheme Annual Report, please use the menu to the right of this page.
In a separate analysis of local fund valuation reports, it was estimated that as at 31st March 2022, the LGPS had an overall funding level of 107%. Since its establishment, the Board has been mainly focussed on developing proposals to tackle the funding deficit (which was £6bn in 2019, £37bn in 2016) and has been successful in improving the sustainability of the LGPS and its funding level. In this welcome but changing situation, the Board was called upon to issue a statement on surpluses, which we did in December 2023.
The work of the Scheme Advisory Board through the period of this report (1 April 2023 – 31 March 2024) included the Board responding to the Government’s “LGPS: Next steps on investments” consultation that was issued in July 2023. This response was informed by a thorough examination of the issue from the different perspectives of those on the Board and we were able to achieve a good deal of consensus in the conclusions reached. As the new government has largely continued with the same agenda then the work done to develop that position stood us in very good stead.
The Board also issued a response to the consultation on "Addressing the local audit backlog in England", asking that pension fund audit should be separated out from the host authority audit. This is something that is has recently been confirmed that the new government will enact in due course.
In response to the publication by the last Government of the Economic Activity of Public Bodies (Overseas Matters), we also contributed heavily to the LGA’s technical brief on the Bill which includes a section on the Bill’s effect on LGPS and the exercise of the fiduciary duty.
The Board has also broken new ground in the public sector pensions world by commissioning a sector-leading report from an expert in Islamic finance to provide advice on the issue of whether the LGPS is Sharia compliant, and also a further report into the impact of career patterns and differences relating to employers or categories of employers worked for on the Gender Pensions Gap. We also continued to evolve our leading position on cost transparency by setting up a series of free regional training sessions for Local Pension Board, Committee members and fund officers on investment cost transparency.
Reflecting the variety and volume of work now being undertaken, the Board decided to start issuing an annual, factually based overview of the work completed by the Board over the previous 12 months. The first of what should become a regular report was issued on 21 January 2025 and covered the period from January 2024 to December 2024 (so overlapping with this scheme annual report).
I would be pleased to hear your views on this our twelfth Annual Report and these should be sent to the Scheme Advisory Board secretariat. The Board is keen to ensure we add to the Report and that the work underlying our compilation and analysis is ultimately recognised through the UK.
Cllr Roger Phillips
Chair of the LGPS Advisory Board
14th May 2025
