Government Actuary's Department
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Review of Local Government Pension Scheme (Scotland)

GAD has completed a review of the local valuation of funds in Local Government Pension Scheme (Scotland).

The Government Actuary’s Department (GAD) has completed a review of the local actuarial valuations of funds in the Local Government Pension Scheme (Scotland) (‘LGPS (Scotland)’).

Scottish Ministers appointed GAD to report under section 13 of the Public Service Pensions Act 2013. This is the second formal report for LGPS (Scotland), based on valuations as at 31 March 2020. The first report related to valuations as at 31 March 2017.

Section 13 requires the Government Actuary to report on whether the following aims are achieved:

  • Compliance
  • Consistency
  • Solvency
  • Long-term cost efficiency

Progress since 2017

In the 2017 report we had recommended that the Scottish Public Pensions Agency (SPPA) should:

  • consider how funds disclose information in a standard way
  • develop a basis for standardised calculations for comparative reasons only

In the 2020 report, we note good progress in relation to both recommendations. We also note that the aggregate funding level had improved despite a sharp drop in asset values immediately before the valuation date.

Scheme overview

GAD’s report shows the LGPS (Scotland) scheme appears to be in a strong financial position as at 31 March 2020. Among our findings were that the:

  • total assets have grown in market value from £43 billion in 2017 to £46 billion in 2020
  • total value of liabilities disclosed in the 2020 local valuation reports amounted to £44 billion using prudent local assumptions
  • aggregate funding level on prudent local assumptions has improved from 102% in 2017 to 104% in 2020


In the report, experts at GAD set out their findings against the 4 aims and made 2 recommendations.

There were that SPPA should:

  • consider the content and where future standardised information should be published, to enable stakeholders to access and compare funds accordingly
  • engage with funds and other stakeholders to consider the impact of inconsistency. It should continue to consider whether a consistent approach needs to be adopted when assessing the impact of emerging issues

GAD actuary Jenny Bullen, who co-wrote the report, said: “We have no concerns over the long-term cost efficiency of the funds. We note the majority of funds in LGPS (Scotland) are in surplus. Our analysis has not raised any concerns around how such surplus is being spread.”

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