Chair’s Statement
On behalf of the Scheme Advisory Board, I am pleased to present the thirteenth Annual Report for the Local Government Pension Scheme (LGPS) in England and Wales, covering a period marked by significant pressure but also by resilience, continuity and continued progress across the scheme. 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 15,704 active employers, 6.8m members and assets of £402bn. It is not only an open DB scheme but one whose membership, including active membership, continues to grow.
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. This report aggregates information supplied in the 86 fund annual reports, produced as at 31 March 2025.
The period covered in this report saw significant change to which the Board and administering authorities had to respond. This included a general election resulting in a change of government. Despite this, the scheme benefited from welcome continuity in the policy agenda, for example, the Fit for the Future consultation largely continued the previous government’s focus on increased investment in UK opportunities and consolidation of the investment pool companies. There was also continued interest in the implementation of the Board’s Good Governance review recommendations.
At the same time, funds were carrying out the triennial valuation process, addressing significant administrative challenges such as McCloud implementation and preparing for pension dashboards and consultations on new member benefit changes.
Sadly, this year saw no respite in the humanitarian disaster in Gaza or the strong feelings that the news from that part of the world evokes in different communities. The Board has therefore continued to assist funds to understand how they can apply their responsible investment policies at the same time as being guided by their fiduciary duty. We therefore procured some further specialist legal advice from Nigel Giffin KC, as well as providing some practical advice for administering authorities to help them respond to increased pressure – from both within and outside the pension committee room.
I am delighted that in the period covered in this report we secured from the Minister, agreement to fund an increase in the secretariat’s resources to develop an LGPS specific peer support offer. I am hoping that this approach can be piloted in the coming months.
The funding position of funds is healthy, and estimated funding levels were reported in 75 annual reports. When weighted by assets under management, the average funding position of these funds was 114 per cent, which is up from the equivalent figure of 113 per cent in the year before (based on data from 69 annual reports).
However, the Board will shortly be completing its usual analysis of all the triennial local fund valuation reports. This more accurate information about funding levels will be available later in the summer and be very relevant to the increased discussion in the media, and in Parliament during the passage of the Pension Schemes Bill, about funding levels in LGPS and what that should mean for employer contribution rates. Much of that debate was undertaken without the benefit of clear evidence, with only rumour and anecdotal information being offered to support some of the assertions made. When it is published the Board’s report will provide a much more robust basis for debate.
Unquestionably though, LGPS funds are all in a more favourable funding position than at the last valuation. It was against this welcome background that the Board reviewed and reissued the Funding Strategy Statement guidance. The revised guidance aimed to strengthen the advice around consulting with scheme employers, better standardising climate risk reporting and to deal more extensively with the implications of being in surplus.
To supplement this report, the Board has, for a second year, issued an Annual Review of its work over the previous 12 months. The latest review, published on 10 February 2026 and covering the period from January to December 2025, overlaps in part with this Annual Report and complements it by bringing to life the work of the Secretariat, illustrating how it supports the Board in fulfilling its statutory responsibilities and delivering activity over the year.
This report generally follows the structure of the Board’s guidance for LGPS funds on how to produce their fund annual reports. To navigate the Scheme Annual Report, please use the menu at the bottom of this page. I would be pleased to hear your views on this thirteenth Annual Report and these should be sent to the secretariat. The Board is keen to ensure we add to the report and that the work underlying our compilation and analysis is ultimately recognised throughout the UK.
Taken together, this thirteenth Annual Report and the Board’s Annual Review describe a scheme that has continued to operate in a demanding environment characterised by political change, operational pressure and heightened scrutiny. Over the period, improving funding positions, strengthening governance arrangements and a sustained focus on evidence‑based decision‑making have supported continuity and stability across the LGPS. The Board remains focused on supporting administering authorities and employers, maintaining confidence for members, and promoting the long‑term sustainability of the scheme.
Chair of the LGPS Advisory Board
20th May 2025
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