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LPFA announces 2013 valuation results of GBP4.8bn fund

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The London Pensions Fund Authority (LPFA) has announced the results of the 2013 valuation of its GBP4.8bn fund.

The funding level is now 91 per cent, up from 81 per cent in 2010, based on the valuation carried out by Barnett Waddingham.
 
The LPFA administers its own pension fund, administering the LGPS on behalf of almost 20,000 employees working for 160 active employers including not-for-profit, charity, private sector and local government employers. It also pays benefits to around 40,000 pensioners.
 
Since the announcement of the preliminary valuation in May last year, the LPFA has invested a significant amount of work into fully assessing employer covenants and financial strength and has taken account of these factors when setting individual employer contribution rates.
 
Susan Martin, CEO at LPFA, says: “The results of our 2013 valuation reflect the expertise and commitment of the entire team at the LPFA. We have worked hard in recent months to refine our asset and liability strategy, and are delighted to see that these efforts are already paying dividends. We are now looking at how we can work with a range of partners to use our Asset and Liability Management approach to help tackle the wider LGPS deficit.
 
“Whilst we are pleased that in the 2013 triennial valuation we are 91 per cent funded on the LGPS basis, up from 81 per cent in 2010, internally at LPFA we take a more conservative and realistic approach. We use swaps +0 per cent because we believe that this risk free, market based valuation gives a better, clearer picture of real funding levels. Using the more realistic, risk free approach we are 61 per cent funded. This still puts us ahead of many schemes, but gives a better benchmark against which to manage our assets and liabilities in real time.” 

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