Marvin OnumonuThe Government Actuary’s Department (GAD) reviewed the 2023 actuarial valuations for the Local Government Pension Scheme (LGPS) Scotland and found all 12 funds showed a surplus as of March 2023.
The total assets stood at £60bn with an aggregate funding level of 141%.
This meant the scheme had more assets than needed for its expected pension payouts.
The financial position had improved since 2020, when four funds were in deficit.
GAD found this was due to strong scheme performance but noted there are still uncertainties about future pension costs.
The review showed that similar funds reached different conclusions about their financial strength.
This was down to the flexible valuation framework, where funds balance prudence and stability in different ways.
Additionally, GAD found this variation in approaches made it harder to compare funds.
There was also a need for clearer explanations about why funds made different decisions.
GAD said more disclosure would help.
Progress was noted on consistency and climate risk analysis since the last review.
GAD recommended that Scottish ministers and the Scottish public pensions agency continue to talk to stakeholders about whether more consistency is needed, consider guidance on how surpluses are used, and keep an eye on climate analysis ahead of the next valuation in 2026.
Garth Foster, actuary at GAD, said: “Our review demonstrates the real value of taking a whole-scheme perspective.
“We provide stakeholders with the transparency and insights they need to understand this vital scheme’s strong performance.”
