What do the 2023 valuations have in store?

LGPS 2023 Valuation

As the new year fireworks returned to Edinburgh castle for the first time since 2020 to celebrate the arrival of Scottish valuation year (we know it’s only us LGPS actuaries that were thinking this!), there’s something comfortingly familiar about another triennial valuation in the LGPS – data, assumptions, liabilities and contribution rates, plus a discussion on risk!

While some things have remained the same (like the home of the Calcutta Cup), the three years since 2020 in between have been anything but familiar having witnessed; a pandemic, the death of the Queen, three prime ministers, 4 chancellors and Russia’s invasion of Ukraine. These have all brought periods of significant uncertainty in all aspects of life – politics, financial markets and demographics

In this publication, we explore what the 2023 valuations have in store. Since the last valuation:

• assets have grown significantly (well in excess of long-term assumed returns).

• interest rates have risen sharply in recent months (as anyone with a mortgage due for renewal this year will be aware of).

• inflation has taken off (with an expected 10.1% increase in benefits in April), and now there are worries it may come back to earth with too much of a bump.

• excess deaths have sadly continued to occur despite the retreat of Covid-19.

If you have any questions about anything covered, please get in touch.