LGPS fund professionals cite rising inflation as their biggest concern

More than half (58 per cent) of Local Government Pension Scheme (LGPS) fund professionals said inflation is their fund’s biggest worry, new research from Alpha Real Capital has revealed.

This research comes after the inflation figures for April 2022 came in at 9 per cent for CPI and 11.1 per cent for RPI.

Alpha Real Capital stated, in light of high inflation prints in recent months and the survey results, managing inflation risk would be top of mind for LGPS funds, especially this year as March 2022 is the date for triennial valuations and a trigger for reviewing investment strategy.

The research also discovered other concerns for LGPS fund professionals, as 19 per cent cited longevity as their biggest worry, 14 per cent said affordability of future accrual was their main concern and 9 per cent cited geopolitics.

More than half (53 per cent) of respondents said the target for their investment portfolio post-valuation would be an inflation + (CPI +) target while 47 per cent cited gilts + as their benchmark.

Alpha Real Capital head of client solutions, Boris Mikhailov, commented: “Out of all institutional investors LGPS funds are arguably best positioned to make the most out of secure income assets.

“This is because they can take a truly long-term view when investing. There is no buyout ‘endgame’ with insurers.

“So, unlike many corporate DB schemes that shy away from investing in illiquid assets or feel a need to reduce their holdings if buyout is on the horizon, LGPS funds can hold these assets for the long-term.”

    Share Story:

Recent Stories

Making pension engagement enjoyable through technology
Laura Blows speaks to Nick Hall, business development director and Chartered Financial Planner at UK-based Wealth Wizards about the opportunities that technology provides for increasing people’s engagement with pensions and increasing their retirement wealth. Please click here for an edited write-up of the video

ESG & DC – creating the right tools
In the latest of our series of Pensions Age video interviews Francesca Fabrizi, Editor in Chief of Pensions Age is joined by Manuela Sperandeo, Head of Sustainable Indexing EMEA, BlackRock and Mark Guirey, Executive Director, Asset Owner and Consultant Coverage - MSCI to discuss some key trends of ESG investing among UK pension funds today. Please click here for an edited write-up of the video

Savings and finance at retirement
Laura Blows is joined by Claire Felgate, Head of Global Consultant Relations, UK, at BlackRock, to discuss savings and finance at retirement. Please click here for an edited write-up of the video

Global equities and transition investing
Pensions Age editor, Laura Blows speaks to Royal London Asset Management equity investment director, Jonathan Price, about transitioning to sustainable investments within global equities
Cost transparency
Pensions Age editor, Laura Blows, discusses investment cost transparency and savings with Aon’s Neil Smith and Chris Hawksworth. Please click here for an edited write-up of the video

Advertisement Advertisement Advertisement