2022 LGPS valuation - Spotlight on market conditions
Spotlight on continued improvement in market conditions
Although the 2022 LGPS valuation process is well underway, markets conditions have changed very significantly. But what does this mean?
Interest Rates and Inflation – Update on Market Conditions
There is potential opportunity to lock in the good news to remove or reduce deficit contributions and the risk that they might increase in future. Employers may now have an affordable exit payment or even be in a surplus position on the exit basis, which is the low-risk basis. You don’t necessarily need to change your pension provision in order to take advantage of this – our starting point is making your LGPS provision more sustainable.
In line with Bulletin 3, Employers can also seek to see this good news factored into their contributions from 1 April 2023, which could result in significant reduction in cash outlay.
We set out here how Isio can help employers by undertaking a “look see” at the current position in the LGPS and setting out the options available for employers to de-risk and/or reduce contributions.
For an LGPS fund:
Current market levels are now significantly more attractive and could present an opportunity to efficiently de-risk by increasing allocations to Index-linked Gilts and/or Nominal Gilts and broader fixed income and credit – read our paper that provides further detail.
Director and Isio Lead for the Local Government Pension Scheme