The assumptions in longevity, for example, assume that life expectancy increases or decreases for men and women. In practice, this is unlikely to occur, and changes in some of the assumptions may be interrelated.
The estimations in the sensitivity analysis have followed the accounting policies for the scheme, on an actuarial basis using the projected unit credit method.
The methods and types of assumptions used in preparing the sensitivity analysis below did not change from those used in the previous period.
| Increase in Assumptions | Decrease in Assumptions | |
|---|---|---|
| Table 31e ii) | £000's | £000's |
| Longevity (increase or decrease in 1 Year)* | 27,367 | (27,367) |
| Rate of Inflation (increase or decrease by 0.25%)* | 42,669 | (42,669) |
| Rate of increase in salaries (increase or decrease by 0.25%)* | 3,702 | (3,702) |
| Rate of discounting scheme liabilities (increase or decrease by 0.5%)* | (81,471) | 81,471 |
*The figures above exclude the impact of the asset ceiling
The objectives of the scheme are to keep employers' contributions at as constant a rate as possible. The council has agreed a strategy with the scheme's actuary to achieve a funding level of 100% over the next 9 years. Funding levels are monitored on a quarterly basis.
The latest triennial valuation of the Fund was carried out by Mercer, the Fund's Actuary, as at 31 March 2022 in accordance with the Funding Strategy Statement of the Fund and Regulation 36 of the Local Government Pension Scheme (Administration) Regulations 2008.
The scheme will take into account of the national changes to the scheme under the Public Pensions Services Act 2013. Under that Act, the Local Government Pension Scheme in England and Wales and the other main existing public service schemes may not provide final salary benefits in relation to service after 31 March 2014.
The Act provides for scheme regulations to be made within a common framework, to establish new career average revalued earnings schemes to pay pensions and other benefits to certain public servants.
The expected contributions to the plan for the next annual reporting period for 2025/26 is £30.505m.
The weighted average duration of the defined benefit obligation for scheme members is 17 years, 2025/26 (17 years 2024/25).
Teachers employed by the council are members of the Teachers' Pension Scheme administered by the Teachers Pensions Agency (TPA), and those employees working in public health that transferred in from the NHS are members of the NHS Pension Scheme. These provide employees with defined benefits upon their retirement and the council contributes towards the costs by making contributions based on a percentage of members' pensionable salaries.