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This Appendix sets out further information on the data used and methodologies adopted in preparing the LGPS (E&W) Low-Risk Funding Index.


The information set out within this update is based on the results published as part of the 2022 actuarial valuation exercise for LGPS (England & Wales) funds. The results can be viewed here: LGPS Scheme Advisory Board – Fund Valuations 2022 (


In calculating the liability values:

  • An approximate rollforward has been carried out using standard actuarial methodologies, allowing for future accrual of benefits, changes in market conditions (including inflation experience reflecting the difference in actual vs assumed inflation) and estimated net cash flows
  • The longevity and other demographic assumptions remain the same as those set out within the published results mentioned above
  • Where fund-specific details are unavailable within the publicly available results, reasonable assumptions have been made
  • A “low-risk” funding basis has been presented, whereby the discount rate used to value liabilities has been set in line with fixed interest government bond yields at the corresponding dates (at an appropriate duration). There are other views of what a “low-risk” basis may be. The basis we have adopted (discount rate based on long term gilt yields with no margin) is used as an illustration of a set of assumptions where an investment strategy could be designed such that if fully funded there is a very low likelihood any future deficit would arise for past service liabilities

In calculating the asset values:

  • An approximate rollforward has been carried out, allowing for cashflows in/out and estimated investment returns based on general market indices suitable to the asset classes held
  • Assets held by funds have been grouped approximately using their strategic asset allocations (provided either within the published valuation reports or the investment strategy statements). The groups are as follows:

– Growth assets (UK)

– Growth assets (non-UK)

– Income / alternative assets

– Protection assets

Further details regarding the data and methodology used to calculate the information set out within this update can be provided if required.

Reliances and limitations

The numerical information set out within the update has been calculated using approximate methods and has been provided for information purposes only. It should not be considered as advice or be relied upon in making any financial decisions.

This work is compliant with the Technical Actuarial Standard TAS 100 published by the Financial Reporting Council, so far as their requirements are material for this.

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