There has been a lot of disturbing news lately about the fall in stock markets, the increase in interest rates, the loss in value of Sterling and the value of bonds and gilts, resulting in a potential impact on pensions.
Your LGPS pension will not be affected by stock market performance. There is no link to your pension benefits, and you do not bear any financial market risks. Your LGPS pension promise is set out in legislation and is calculated based on your pay and service.
Although short term investment values may vary, the LGPS is a long term investor. We securely manage the Fund to address any longer term impacts. Therefore, we can assure all LGPS Scheme members that their contributions and pensions, whether in payment or built up to date, will be unaffected by this stock market volatility.
If you pay into an AVC account or have pensions with other providers, you may wish to contact your provider directly to check the impact on these pensions.
However, changes in inflation do affect your LGPS pension benefits. We adjust pension benefits in April each year to reflect the cost of living. This includes pension accounts for contributors, benefits on hold (deferred) pensions and pensions in payment. The adjustment is usually based on the September to September change in the Consumer Price Index (CPI) and applies to your pension from the following April.
If you have already claimed your pension, see How your pension keeps pace with inflation to find out more.
If you are still paying into your pension, see What benefits you build up to find out more.