06 March 2023
10 mins
With less than a month to go to the statutory deadline, the 2022 valuations in England & Wales are nearing a close. Hopefully now it is just a case of dotting i’s and crossing t’s (also known as dealing with the last few ‘complex’ employers). We’ve also just received confirmation of the format of the SAB/GAD dashboard which will be included in every valuation report. It’s amazing to think that preparations for the next valuation are likely to start in about 18 months’ time. With this in mind, we will be in touch with all our funds to set up a feedback meeting so we can take all the learnings and experiences from the 2022 valuations and build them into plans for 2025.
The first of our 2023 valuation forums took place on 22 February. This generated some interesting discussion around the funding decisions that Scottish funds will be considering this year. The session centred around the information set out in this note: What do the 2023 valuations have in store? It was great to have attendees across all of our Scottish funds and we look forward to the year ahead! We have also launched our LGPS 2023 Valuation Toolkit.
DLUHC recently closed a lightning quick consultation on moving the date on which CARE benefits are revalued from 1 April to 6 April. The consultation is designed to align the CPI value used to increase CARE pensions with the value used to uplift the value of pension benefits at the start of the Pension Input Period as part of the Annual Allowance calculation. While the move makes sense, the last-minute nature of any changes is likely to cause administrative headaches.
At end January a consultation was launched setting out proposed amendments to how the England & Wales SAB’s cost management process operates. These changes are in response to changes already being made to HMT’s cost management mechanism. The proposals are largely technical in nature and designed to ensure that the SAB process can still input into the HMT mechanism. However there are a couple of points where more detail would be helpful. We set these out in our formal response to the consultation which can be found here.
With reporting on the Gender Pay Gap now common amongst most businesses, the focus is starting to shift to the Gender Pension Gap (GPG). Recently, the Minister for Pensions (Laura Trott) confirmed that the Government is considering reporting regularly on the GPG. We spent some time at the end of 2022 focusing on the magnitude and causes behind the GPG in the LGPS and how it can be reduced. If you want to be on the front foot in this space, we can carry out analysis of your membership similar to that discussed in our webinar (please ask your usual Hymans Robertson contact for more information).
As the dust settles on the English & Welsh valuations, funds are gearing up for the inter-valuation period. With high inflation, higher interest rates and turbulent markets since the valuation, there’s an increased demand on funds to keep stakeholders informed. In addition, new employer flexibility regulations open up the possibility of DDAs and contribution reviews, and suddenly three years starts to feel like an eternity. To help our funds stay on the front foot and have all these answers at their fingertips, we’ve overhauled our funding risk monitoring digital solutions. Launching on 1 April, our on-demand, self-service, daily funding and risk analytics will be available via Frontier. More details to follow - watch this space!
Preparations are gathering pace as we approach the 31 March 2023 accounting year-end. In our discussions with auditors, it has become apparent that 2021/22 accounts have not yet been signed off in several cases. All 2023 reports will be prepared on the basis that the 2022 accounts have been approved and so it is important that any revisions required to the 2022 accounts (given audit delays) are requested and approved before work commences on the 2023 reports. Please direct any questions in respect of this to LGPSCentralAccountingTeam@hymans.co.uk
Following the successful launch of our LGPS Online Learning Academy in June 2021, we have been listening to feedback and added improvements throughout our new version 2.0 learning plan. The key changes will see shortened and refreshed modules (new videos, jargon busters and knowledge checks) and see it mirror the same 8 topics of our National Knowledge Assessment. This means you can have easy alignment between your assessment tools and your training platform – much easier for filling in those knowledge gaps! Funds will also now be able to add their own training documents or fund policies to LOLA, allowing their users to have a ‘one-stop’ shop for key training material, alongside the introduction of gamification, improved user experience and much more! Please contact Andrew McKerns if you have any questions or would like a demo.
March sees the launch of our administrator training modules covering all elements of the administration and management of the LGPS, with the first session providing an introduction to the scheme and taking place on 22 March. If you haven’t already registered your interest you can do so here, reserving spaces for members of your administration team for any specific sessions of interest.
Last month, we hosted the second webinar in our two-part series focused on Effective Business Planning in the LGPS. Kate Dickson talked us through key success measures, creating a plan for implementation and delivery, and monitoring and reporting. If you weren’t able to join live, you can now catch the session on-demand.
We’re looking forward to once again supporting the annual LGC Investment Seminar at Carden Park. Our very own Susan Black will be joining Euan Miller, Denise Le Gal and David Vallery to discuss the latest in the Good Governance project, workforce issues and training and development. Click here to book your place.
Catch up on our latest episode of Hymans Robertson On… where Susan Black, our Head of LGPS Governance, Administration and Projects, and Ian Colvin, our Head of Benefits Consultancy, discuss workforce planning with Dan Chessell and Amanda Crawford from Essex Pension Fund. Amanda and Dan share their good news story on the success they’ve had in restructuring their team and what skills they believe are necessary for LGPS funds in the future.
Ongoing easing in input price inflation from high levels supports the idea that recent falls in headline inflation may be sustained. Year-on-year inflation looks to have peaked in Europe and is well past its peak in the US. Forecasters are confident that headline inflation will come down over the next few quarters, given falls in energy prices. At an underlying level – excluding food and energy – easing supply-chain pressures should contribute to a more general fall in goods inflation. Against that, tight labour markets are leading to strong wage growth on both sides of the Atlantic, and service-sector inflation is likely to be stickier. Against that backdrop, we consider the inflation outlook and the balance of risks around that outlook. You can read our latest quarterly update here.
Globally, we lose over ten million hectares of forest each year. This contributes to climate change and biodiversity loss as well as having wider economic and social implications. Institutional investors have a key role to play by understanding their exposure to deforestation and engaging with investment managers on this topic. Together with Global Canopy, we have identified the main actions which asset owners can take to understand deforestation and address this issue in their investment portfolios. You can read our paper here. We have also published related articles for investors on the COP15 biodiversity conference and on Biodiversity.
2022 was another unusual year for UK mortality. We again saw more deaths in the UK than expected under pre-pandemic projections. However, the number of deaths mentioning COVID-19 was relatively low. A panel of experts at a recent Club Vita webinar discussed what may be causing the excess deaths, if the patterns will continue and how the 2022 data might feed into pension fund longevity assumptions. As emerging trends continue, we’ll be watching the Club Vita analysis closely to ensure our clients have access to the latest insights on post-pandemic longevity risks
If you have any questions about anything covered, please get in touch.
Download our publication to learn more
Opens in new window Download reportWe pride ourselves on being thought leaders and are constantly discussing the many issues facing and shaping up our industry. Sign up to find our current thinking on topical issues.
Opens in new window Subscribe
