On the go: Tax-backed employers may struggle to maintain their contributions in line with the Northern Ireland Local Government Pension Scheme’s growth, the Government Actuary’s Department has found.
The funding position of the scheme has improved since March 31 2016 and is in a strong financial position, a Section 13 report by the department disclosed.
Total assets in the scheme have grown in market value from £5.8bn to £8bn, while total liabilities disclosed in the 2019 local valuation report amounted to £7.2bn.
The aggregate funding level on the prudent local basis has improved from 96 per cent to 112 per cent, as of 2019.
The report found that the improved funding level is due in large part to strong asset returns over the three-year period to March 31 2019.
A change in the demographic assumptions buoyed funding levels, although this was offset by changes in financial assumptions.
In the three years to March 31 2019, the size of the scheme increased significantly, the report noted.
It added, however, that the ability of tax-backed employers to increase contributions, if this were required, may not keep pace with this growth.
“This could become a risk if, for example, there were a severe shock to return-seeking asset classes,” the report stated.
The review also indicated that the scheme was compliant with regulations and is able to demonstrate solvency and long-term cost efficiency.
“The fund is in a strong financial position and the funding level compares well with the LGPS England and Wales funds,” the report noted.
