The 2024 Triennial Valuation of the Public Sector Section of the Fund has been agreed
The Trustees on 13 December 2024 agreed the 2024 triennial actuarial valuation of the Public Sector Section of the Fund. This follows extensive negotiations with the Principal Employer to agree the assumptions used.
The valuation results show the Fund to be in surplus as at 31 March 2024 and as a result the Trustees agreed with the employer that there should be an element of derisking of the Fund’s investments. While derisking can lead to lower overall returns, it also reduces the impact of any downturn in investments and, overall, the resulting reduced volatility is a good thing for both members and the Principal Employer.
In addition the Trustees agreed to an abatement of employer contributions in accordance with the Fund Rules. This means that over the period until the next actuarial valuation the future service cost to the employer is reduced to the minimum allowable under the Fund Rules. This was considered carefully against the backdrop of the surplus identified and the fact that the employer had paid significant additional contributions to the Fund in the past to cover deficits identified at previous triennial valuations.
After allowing for the derisking and the abatement of employer contributions this leaves a surplus of approximately £2.5 billion which is being retained as a buffer against future adverse movements in funding.
In reaching a decision the Trustees took comfort from letters from the Commissioner and the Mayor of London in relation to the Pensions Review, these are included below for information. In addition an extension to the Pensions Funding Agreement was also reached which provides additional security to members should a deficit arise over the period up to and including the 2033 triennial valuation.
