Scottish Pensions Fund Flexes Financial Muscle: GAD Report Reveals Solid Gains
The Government Actuary’s Department (GAD) has delivered its lowdown on the Local Government Pension Scheme (LGPS) in Scotland, highlighting key aims like compliance, consistency, solvency, and long-term cost efficiency.
Big Steps Forward Since 2017
Back in 2017, GAD urged the Scottish Public Pensions Agency (SPPA) to tidy up how pension funds share info and to cook up standard calculations for easy comparisons.
- Standardise fund disclosures
- Develop consistent calculation methods for benchmarking
The 2020 report praises good headway on both fronts. Despite a nasty dip in asset values just before the evaluation, the overall funding level still improved.
Scheme Overview: Strong as Steel
At 31 March 2020, LGPS Scotland shines financially:
- Assets climbed from £43bn in 2017 to £46bn in 2020
- Liabilities stand at £44bn, based on cautious local assumptions
- Aggregate funding level rose to 104% in 2020, up from 102% in 2017
GAD’s Top Recommendations for SPPA
The experts recommended SPPA should:
- Decide what info will be standardised and where to publish it, making comparisons easy for stakeholders
- Work with funds and other players to assess inconsistency impacts, and consider a unified approach for future challenges
“We have no concerns over the long-term cost efficiency of the funds. The majority of LGPS Scotland funds are in surplus. Our review found no worries about how the surplus is being managed,” said GAD actuary Jenny Bullen, co-author of the report.
