The £4.8bn London Pensions Fund Authority (LPFA) has improved its funding level by 10 percentage points over the last three years, it announced today.
The fund’s latest triennial valuation for 2013 revealed a 91% funding level – an increase from 81% in 2010.
LPFA said the improvement had come about as a result of its asset and liability management approach, good investment returns over the inter-valuation period and appropriate management of interest rate and inflation risks.
However, LPFA chief executive Susan Martin (pictured) said while it was pleased with the valuation results, internally it takes a more conservative and realistic approach.
She added: “We use swaps +0% 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% 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.”
The LPFA said the expected impact of the 2014 LGPS scheme changes has been factored into the valuation results.
Barnett Waddingham carried out the valuation.
Comments