West Yorkshire Pension Fund Councillor Ian Greenwood Chair of West Yorkshire Pension Fund Joint...
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![Page 1: West Yorkshire Pension Fund Councillor Ian Greenwood Chair of West Yorkshire Pension Fund Joint Advisory Group and Investment Advisory Panel.](https://reader036.fdocuments.net/reader036/viewer/2022062523/5a4d1ad97f8b9ab059974093/html5/thumbnails/1.jpg)
West Yorkshire Pension FundWest Yorkshire Pension Fund
Councillor Ian GreenwoodCouncillor Ian GreenwoodChair of
West Yorkshire Pension Fund Joint Advisory Group and Investment Advisory Panel
![Page 2: West Yorkshire Pension Fund Councillor Ian Greenwood Chair of West Yorkshire Pension Fund Joint Advisory Group and Investment Advisory Panel.](https://reader036.fdocuments.net/reader036/viewer/2022062523/5a4d1ad97f8b9ab059974093/html5/thumbnails/2.jpg)
West Yorkshire Pension Fund – Funding Levels
107
82
95
87
90
76
63
68
2001 Valuation
2004 Valuation
2007 Valuation 'Like for Like'
2007 Valuation – Actuary
2007 Valuation – Final
31 March 2008 Interim Review
15 October 2008 Estimate
31 October 2008 Estimate
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Factors Affecting Valuation Outcome
LiabilitiesLiabilities• Gilt Yields• Inflation• Increase in Earnings• Mortality Assumptions
AssetsAssets• Expected Investment Returns
Employers’ Contributions• Future Service Assumptions• Deficit/Surplus Position• Recovery Period• Phasing-In of Changes in Level of Contributions
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Valuation
2001 2004 2007 March2008
October2008
£m £m £m £m £m
Assets 4,666 4,563 7,306 7,272 5,700
Liabilities 4,353 5,555 8,102 9,518 9,100
(Deficit)/Surplus 313 (992) (796) (2,246) (3,400)
Funding Level 107% 82% 90% 76% 63%
West Yorkshire Pension FundWest Yorkshire Pension FundAssets and LiabilitiesAssets and Liabilities
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2007 Actuarial Valuation
• The analysis of the change in deficit between 2004 and 2007 is as follows:
Analysis £mDeficit as at 31 March 2004 -992Investment Gain versus valuation assumptions 1,359
Change in gilt yields -618Change in assumptions(e.g. mortality) -393
Impact of smoothing and phasingof contributions -202
Other factors(e.g. membership movements) +50
Deficit as at 31 March 2007 -796
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2007/082007/08 2006/072006/07 2005/062005/06 2004/052004/05£m £m £m £m
ContributionsEmployers 206.0 190.2 156.5 132.5
Employees 93.6 90.2 84.6 78.6
299.6 280.4 241.1 211.1
Benefits Payable
Pensions 207.8 192.0 179.2 168.3
Lump Sums 76.7 66.5 37.1 36.9
15.1 21.9 24.8 5.9
Investment Income 219.7 196.6 183.5 155.0
Positive Cash Flow 234.8 218.5 208.3 160.9
West Yorkshire Pension FundWest Yorkshire Pension FundPositive Cash flowPositive Cash flow
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7Mercer
RPI 4%pa, 2007 valuation planned employer contributions
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Projected Contributions
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Projected Investment Income
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8Mercer
RPI 5%pa, 2007 valuation planned employer contributions
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9Mercer
RPI 4%pa, employer contributions at future service rate only
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Projected Investment Income
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10Mercer
RPI 4%pa, 2007 valuation planned employer contributions, investment income ignored
-400
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UK Equity Risk PremiumUK Equity Risk Premium
0
2
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1924 1930 1936 1942 1948 1954 1960 1966 1972 1978 1984 1990 1996 2002 2008ERP: Rolling 25-year basis ERP average = 3.7%
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Valuation of the US Stock Market
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2001 Valuation 2004 Valuation 2007 Valuation
Future Service 11.3 10.2 13.2
Recover (Surplus)/Deficit (2.7) 3.8 2.6
8.6 14.0 15.8
West Yorkshire Pension FundWest Yorkshire Pension FundAverage Employers’ Contribution RateAverage Employers’ Contribution Rate
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