The Valuation section of the website contains information on the 2016 triennial valuation carried out by the actuary.


What is the triennial valuation?

Every three years, a formal valuation of the whole Fund is carried out under Regulation 62 (1) of LGPS Regulations 2013 to assess and examine the ongoing financial position of the Fund.

Its purpose is to value the assets and liabilities of each individual employer and the pension fund as a whole, with a view to setting employer contribution rates which will result in each employer’s liabilities becoming as close to fully funded as possible over the agreed recovery period outlined in the Funding Strategy Statement.

The valuation results are calculated in the following way: 

  1. LPP on behalf of the LPFA fund provide finance and membership data to our actuary, Barnett Waddingham who uses it as a basis for the valuation.
  2. This data is combined with a number of economic and demographic assumptions with consideration to the LPFA’s Funding Strategy Statement to create a common employer’s contribution rate.
  3. This common rate is used as a basis for the individual employer results, with adjustments made to take into account a number of different criteria; including membership profile, past service deficit, current funding position and funding category.


On the whole fund assumptions, the LPFA Pension Fund was approx. 96% funded at 31 March 2016, an improvement from 91% at 31 March 2013. At the 2013 valuation, the maximum recovery period was 17 years. At the 2016 valuation, the maximum recovery period is 14 years.

The categorisation for each employer is using the same approach as the 2013 valuation. Employers are divided in to category A, category B and category C. The breakdown of these categories is as follows:

Category Description Open Closed
A1 Employers with Tax raising powers x N/A
A2 Employers with government guarantee or transferee admitted body whereby scheme employer is an A1 or A3 x N/A
A3 Employers that provide substantial security beyond 70% of cessation deficit x N/A
A4 Schools/Academies x N/A
B1 Employers that provide LPFA with significant security between 40% to 69% of cessation deficit x x
B2 Employers that provide a legally valid/credible parent company guarantee x x
B3 Employers that receive implicit support from the government with strong financial statements x x
B4 Further Education, Higher Education, Social Housing with strong financial statements x x
C1 Employers that financially stable with no security/guarantee/assurances x  
C2 Employers with identified risk x  
C3 Employers that financially stable with no security/guarantee/assurances   x
C4 Employers with identified risk   x


All employers have been written to outlining their initial valuation category for the 2016 valuation together with how the categorisation could potentially be improved. Once the LPFA have reviewed the results they will be sent to all employers and you will have the opportunity to meet to address any questions you have regarding the results.

Employers wishing to improve their categorisation can do so by implementing security. By implementing security employers will be able to move to category A or category B and benefit from lower contribution rates due to the lower risk posed to the fund.

All employers will receive a Rates & Adjustments certificate from the actuary in March 2017 which confirms the minimum employer contributions required for the following three years, commencing from 1 April 2017. Any employer is welcome to pay a higher contribution rate than that suggested if they so wish, or to make any one-off payment to reduce their liabilities at any point in time. The effect of this can be modelled for Fund employers.

The 2016 Valuation Report has been finalised and approved by LPFA board. This document provides details on the funding position across LPFA’s fund and outlines the assumptions used in the valuation process. The report can be found here.