Isio’s Prudence Watch for LGPS (E&W) Funds – Additional analysis

Additional analysis

Isio analysed the Prudence Watch scores to consider whether factors such as Pool or asset size influenced the level of prudence being taken. Both factors show a similar lack of consistency as we saw with the other analysis. Interestingly there remains variation across Funds in the same pool. It will be interesting to see if these differences reduce at future valuation cycles.

Prudence Watch Score – by pool

Source: Isio analysis based on the 86 funds in the LGPS (E&W). We have excluded the Environment Agency closed Fund.

Prudence Watch Score – by asset size

Source: Isio analysis based on the 86 funds in the LGPS (E&W). We have excluded the Environment Agency closed Fund.

Comparison of the Fund’s ongoing funding level with Isio’s low-risk funding level

Source: Isio analysis based on the 86 funds in the LGPS (E&W). We have excluded the Environment Agency closed Fund.

The chart compares the Fund’s ongoing valuation funding level with Isio’s low-risk funding level. Fund’s advised by Barnett Waddingham have ongoing funding positions that are typically more prudent that Isio’s low-risk measure. Whereas Fund’s advised by Hymans Robertson adopt assumptions that are less prudent than Isio’s low-risk funding. This considers the past service benefits members have already built up. As we saw earlier, the picture is different looking at primary rate contributions which reflects benefits for future service.