The Pension Fund Committee of Lancashire Council met on Friday 23 January 2026 to discuss and decide on key parameters for the 2025 valuation of the pension fund. The committee ultimately voted to set the funding buffer at 115% with a 20-year surplus repayment period, a decision that aimed to balance the need for financial prudence with current affordability concerns for employers.

Pension Fund Valuation Parameters

The primary focus of the meeting was the determination of key parameters for the 2025 valuation of the pension fund, specifically the funding buffer and the surplus repayment period. The report presented to the committee outlined three potential funding buffer options: 110%, 115%, and 120%. The officers' recommendation was to adopt the 120% buffer, which they argued would best fulfil the committee's fiduciary duty to pension fund members and employers by providing the most robust protection against future contribution rate increases.

Councillor David Whipp proposed retaining the current parameters of a 110% funding buffer and a 16-year surplus repayment period. He argued for generational equity and expressed concern that maintaining higher contribution rates than necessary could lead to job losses within local authorities, ultimately harming beneficiaries. Councillor M Smith seconded this proposal, highlighting the fund's strong current position, with a surplus of approximately £3 billion, suggesting there was ample scope for growth even with reduced contributions.

However, concerns were raised about the lack of actuarial advice for the 16-year repayment period in conjunction with the 110% buffer. Mark, the fund actuary, clarified that his modelling had focused on a 20-year recovery period for buffers ranging from 110% to 120%. This procedural issue led to an amendment being proposed by Councillor Gordon Johnson and seconded by Councillor Mark Clifford to strike out the 16-year period and adopt a 20-year surplus repayment period, aligning with the provided actuarial advice.

Following a procedural adjournment to clarify the voting process, the committee first voted on a motion for a 110% buffer with a 20-year surplus repayment period. This motion was lost.

Subsequently, a motion was put forward for a 115% buffer with a 20-year surplus repayment period. Councillor Daniel Matchett, Cabinet Member for Health and Wellbeing, spoke in favour, suggesting it was a sensible compromise given the current financial pressures on local authorities and the potential for future market volatility. Councillor Mrs Marion Atkinson also supported this option, noting that while 120% was the officers' recommendation, 115% would still meet the committee's fiduciary commitments.

The motion for a 115% buffer and a 20-year surplus repayment period was carried. Ms S Roylance recorded her opposition to not following the actuary and officers' advice for a 120% buffer, stating her belief that it was the most prudent option. Mr P Crewe also requested his vote be recorded. No further motions were put forward, and the committee agreed to proceed with the 115% buffer and 20-year repayment period.

The decision to set the funding buffer at 115% with a 20-year surplus repayment period was made to balance the need for financial security with the affordability for employers. While the officers and some committee members advocated for the more conservative 120% buffer to mitigate future risks, the adopted 115% level was considered to still meet fiduciary duties while offering greater immediate relief to employers. The committee acknowledged the volatility of financial markets and the potential for future fluctuations, underscoring the importance of ongoing monitoring and review.

Next Meeting

The date of the next Pension Fund Committee meeting was confirmed as Friday 20 February 2026, at 10:30 am in Committee Room 'A' – The Tudor Room at County Hall, Preston.