On the go: While the Local Government Pension Scheme had a return of 6.2 per cent in 2019, its advisory board is monitoring the current market turmoil closely and is prepared for a downturn in 2020.
According to its annual report published on Friday, the total assets of the LGPS increased to £291bn – a change of 5.9 per cent when compared with the previous year – while its investment return was above the 4 per cent registered in 2018.
However, with the impact of the coronavirus pandemic, it is expected that the scheme will be “in a different territory this time next year”, argued Roger Phillips, chair of the LGPS advisory board.
He said: “The report reflects the March 2019 situation, but it also gives reassurance to us now on the capacity, resilience and strength of the LGPS, particularly to cope with Covid-19.
“We continue to monitor the situation, we are long-term investors. But we also need to watch the dividend payments and their impact on cash flow as well.
“The fund was cash positive [in 2019], including investment return. Obviously, of the 88 funds, they will be in different places but everyone is alert to that.”
Pensions Expert reported in May that from 82 administering authorities across the UK polled by the LGPS, 5 per cent of respondents anticipated cash flow issues in 2020-21, with a further 8 per cent saying they considered such issues a definite possibility.
