London Pensions Fund Authority Employers Conference Actuarial Valuation Active Sub Fund results

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London Pensions Fund AuthorityEmployers
ConferenceActuarial Valuation - Active Sub Fund
results

• Lorna Tonner
• 23 November 2007

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Why carry out a triennial valuation?

• Meet regulatory requirements
• Health check
• Set employer contributions
• A base for future FRS17 reporting

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What is the pension fund?
Investment returns
Employer contributions
Members contributions
Pension Fund
Members benefits
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Each employer has own slice
Investment returns
Members contributions
Employer contributions
Members benefits
But today we concentrate on whole fund
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What are liabilities?
Future expected benefit payments
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Where were we?
Deficit 486m
Funding level 74
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What has happened financially?

• Asset returns excellent
• 7 p.a. better than expected
• Change of LPFA investment strategy
• BUT
• Market outlook anticipates lower returns in future

Overall improvements in funding level
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What about mortality?

• Two considerations
• current mortality
• expectation of rate of future improvement

Rate of improvement in life expectancy shows
signs of speeding up for LPFA Active Fund
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Scheme changes

• Rule of 85 abolition
• New scheme 2008
• Commutation

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Where are we now?
Deficit 490m
2007
Assets2280m
Liabilities2770m
Funding level 82
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What about contributions?
Longer life expectancy is main culprit
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But remember employer variability
INITIAL INDICATION ONLY
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Thank You

• Any questions?