Fund Operation
How Does The Fund Operate?
The Wiltshire Pension Fund is established under Local Government Pension Scheme Regulations. Its purpose is to meet all future pension liabilities of its scheme members, whilst at the same time seeking to minimise the contributions that need to be paid into the Fund by the employer bodies. The level of employer contributions is assessed every three years through an actuarial valuation of the Fund.
Each valuation establishes the solvency position of the Fund, that is, the extent to which the investments of the Fund are sufficient to meet the Fund's pension liabilities accrued to date. The objective is that the Fund should be at least 100% funded on an ongoing basis.
The amount contributed to the Fund by scheme members is fixed by statute, based on banding according to pay levels. Similarly, the pension benefits paid from the Fund are fixed by statute, although employer bodies do have limited discretion on certain benefits.
Pension benefits are therefore being pre funded, and so, if looking at an individual scheme member, their contributions, plus those made by their employer, are invested pending their retirement, when their pension benefits become payable. In simple terms, the better the investments perform, the less the employer will need to pay into the Fund.
Assuming a normal positive investment return over the long term, it is likely that the employer will need to contribute around £3 for every £1 contributed by the scheme member. So by NOT being in the scheme, an eligible employee is foregoing a valuable benefit!
Wiltshire Pension Fund, Wiltshire Council - Bythesea Road,Trowbridge, Wiltshire, BA14 8JJ.
© 2009 Wiltshire Pension Fund.