Bedfordshire local pensions “in the bottom five” for funding levels

It’s “not great” that the pension fund is in the bottom five for funding levels, the chair of the Bedfordshire Local Pension Board said.

But with a funding level of over 90 per cent it’s not something he is concerned about, Ian Coleman told last week’s Bedfordshire Local Pension Board meeting, (Thursday, 24 October).

Section 13 of the Public Services Pensions Act 2013 requires a report to be published on the health of the Local Government Pension Scheme (LGPS) every three years.

Mike Batty, chief officer for Bedfordshire Pension Fund, said the report was issued by the Government Actuary’s Department (GAD).

“The report is in respect of the 2022 triennial evaluation,” he said.

“Bedfordshire Pension Fund has one advisory flag in respect to solvency.

“We have the lowest or one of the lowest funding levels in the LGPS but this is at 96.9 per cent – an improvement on the 2019 valuation.

“It should be noted that it’s a relative measure, so flags will be given in every evaluation, so the report should be taken in that context,” he said.

“Overall the report shows an improved health of the LGPS in general, with improved funding levels across the board,” he added.

The Section 13 Report is used to identify any outlying funds measured against four aims; compliance, consistency, solvency and long term cost efficiency.

Bedfordshire Pension Fund also received three green flags on solvency measures. The GAD expects no specific action other than a general review when a white flag is given.

Board chair, Ian Coleman said: “I was surprised that we got the white flag. I didn’t realise that we were in the bottom five for funding level, with a funding level of over 90 per cent.

“I remember when the funds were 60 and 70 per cent. It’s not something that I would be concerned about. It’s not great to be there, but it’s not a concern,” he added.

Mr Batty said: “Absolutely not, its relative measure, it’s something that obviously it has to be quantified and that’s where Bedfordshire is.”

The Pension Fund received five green flags for long term cost efficiency.

GAD did not raise any flags for any fund under the objective of consistency, and said all LGPSs actuarial valuation reports complied with Section 13.

Scheme member representative, Emma Payne, asked if the fund administration had noticed anything since the “rumours about the budget have surfaced”.

Claire Bennett, pensions administration manager, replied: “We haven’t been unduly pressured by people asking about what’s going to happen as a result of the budget next week.

“Whether when we see what happens in the budget we will be inundated. I know there has been some work… with joint communications depending on what may or may not happen.

“We haven’t seen any particularly large number of people looking to retire at this point in time.

“Maybe that will change in the next six months if the budget does remove or caps the amount of tax-free lump sum people can have,” she said.

By John Guinn
Local Democracy Reporter