The South Yorkshire Pensions Authority has cut average employer contribution rates from 19% of salary to 13% after the Local Government Pension Scheme’s (LGPS) latest actuarial valuation showed its funding position had strengthened significantly to 142%.
The decision was made following the £12.1bn fund’s latest actuarial valuation as of 31 March 2025. The 142% funding level compares to the 119% level recorded at its 2022 valuation.
The authority said the change would deliver savings of more than £90m for participating employers over the next three years compared with the previous three-year period.
It said the biggest beneficiaries would be the four South Yorkshire councils – Barnsley, Doncaster, Rotherham, and Sheffield – alongside a wider group of participating employers, with the reduction expected to ease budget pressures and free up more resources for frontline services and local priorities.
“By reducing employer contribution rates at a time when budgets remain under pressure, this will help our local councils and other organisations continue to deliver vital services.”
Gillian Taberner, South Yorkshire Pensions Authority
The South Yorkshire Pensions Authority has also formally agreed a new Funding Strategy Statement, setting out how it plans to manage the fund over the next three years.
According to the authority, the statement will support long-term solvency while maintaining stable and affordable employer contributions through a balanced investment strategy.
Gillian Taberner, director of the authority, said: “We have had positive engagement with our participating employers throughout the process of finalising the valuation and setting the Funding Strategy Statement for the next three years, and we’re grateful for their input, feedback and constructive challenge.”
She added: “By reducing employer contribution rates at a time when budgets remain under pressure, this will help our local councils and other organisations continue to deliver vital services, while we remain firmly committed to ensuring sustainability and affordability of their contributions over the long term.”
The vast majority of LGPS funds have reported their funding levels following their latest actuarial valuations, with more than nine in 10 reporting a funding level of more than 100%. Pensions Expert’s sister title LAPF Investments has published a list of 87 funds and their valuation data.
Last year, the Ministry of Housing, Communities and Local Government said it would review contribution rules after the Royal Borough of Kensington and Chelsea’s investment committee voted to reduce the employer contribution rate to zero for the 2025-26 financial year – against the advice of the fund’s actuary.
