The Social Housing Pension Scheme (SHPS) has reached a recovery plan agreement after it registered an improvement in funding level from 75 per cent to 77 per cent in its 2020 actuarial valuation, according to TPT Retirement Solutions.

On the matter of the funding level improvement, TPT said unfavourable market conditions had led to an increase in liabilities, but investment returns had been better than expected at around 9 per cent between the valuations, adding that the scheme’s deficit had increased from £1,522m to £1,560m over the three-year period since the 2017 valuation.

The scheme’s Employer Committee and Scheme Committee, which represent the trustees, have reached agreement on a recovery plan in which maintaining a prudent funding approach has been balanced with the priorities of participating employers for predictable and affordable contributions.

This will replace the existing recovery plan, which was agreed in 2018, and will see aggregate deficit contributions of £175m per annum payable with effect from April 2022 to March 2028.

The deficit contributions will increase at 5.5 per cent per annum from 1 April 2023.

Employer Committee chair, Emmy Labovitch, said: “The Employer Committee, representative of large and small sector organisations, has been working hard to obtain a fair outcome for scheme employers over the last six months. Discussions with the Scheme Committee were constructive.

“We were able to impress upon them that the Employer Committee could only endorse a deficit recovery plan that reflected the priorities and constraints of the social housing sector.”

Scheme Committee chair, Melanie Cusack, said: “The Scheme Committee were keen to engage with the Employer Committee to understand affordability concerns in challenging times.

“Reaching agreement on contributions has involved compromise on a later recovery period end point than originally proposed however we are confident this does not undermine the security of member benefits.

"We recognise that there is significant benefit for the scheme and employers in having a plan that is straightforward, linear and enables employers to plan ahead and budget.”

Share Story: