The Local Government Pension Scheme (LGPS), the largest defined benefit (DB) scheme in England and Wales, has seen its assets under management drop nearly five percentage points (4.9%) to £276bn (€319.8bn), according to its latest annual report.

These assets, the report said, were invested in pooled investment vehicles (68%), public equities (14%), bonds (6%), direct property (3%), as well as other asset classes (9%).

The net investment return on these assets (after fees) as at 31 March 2020 was -4.8% compared with 6.2% in 2019, stressing that the 2020 figure reflected less stable financial market conditions than in 2018/2019.

The report – which aggregates information supplied in the 88 LGPS fund annual reports – also showed that the scheme maintained a positive cash-flow position overall, including investment income.

As at the 31 March 2019, the LGPS liabilities were estimated at £291bn indicating an overall funding level of 98%.

During the intervening years since establishment, the board actively developed proposals to tackle the funding deficit – £6bn in 2019, £37bn in 2016 – to improve the sustainability of the LGPS and its future funding levels.

The next triennial valuation of the LGPS will be as at 31 March 2022, the report announced.

Furthermore, the total membership of the LGPS grew by 261,000 (4.2%) to 6.16 million members in 2020 from 5.89 million in 2019.

There was an increase in each category of scheme membership contributing active members (3.1%), deferred pensioners (4.0%), and pensioners (5.7%).

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