2021 NAO on Pensions

In March 2021 the NAO published a report on Public Service Pensions

The report is mostly based on the 8 million members of four of the largest public service pension schemes

  • the armed forces
  • civil service
  • NHS
  • teachers’ pension schemes

The report mentions LGPS Schemes, but is mostly concerned with these four schemes. But it makes interesting comparisons with our LGPS schemes.

  • (page 5) Funded schemes (such as the Local Government Pension Scheme), by contrast, use employer and employee contributions to create investment assets in a pension fund, with those assets and associated returns used to pay for future pensions.
  • (page 14) Many public sector schemes outside of central government are ‘funded’ schemes, whereby contributions from employees and employers are invested in a pool of assets. The returns on these assets are then used to pay pensions as they fall due. The Local Government Pension Scheme is the largest funded public sector pension scheme with almost six million members in 2019.