Berkshire Pension Fund sees ‘no progress’ in funding levels, councillor says

A councillor has said the Berkshire Pension Fund has seen ‘no progress’ in its financial position in the last three years.

The fund is managed by the Royal Borough. It is responsible for overseeing the pensions of thousands of public-sector workers across Berkshire.

Every three years, the assets and liabilities of the pension fund are valued in order to set employer contribution rates.

At a Berkshire Pension Fund committee meeting on Monday, March 16, Liam Drysdale , from the fund’s actuary Barnett Waddingham, said the 2025 draft valuation shows a ‘largely stable’ position.

But councillors raised concerns about the impact inflation is having on the fund and what this means for employers.

In 2022, the fund was valued at 86 per cent – meaning it has 86 per cent of the assets it needs to cover its future liabilities.

The 2025 valuation showed the fund is still at 86 per cent.

Mr Drysdale said: “We determine whether the fund and employers are in a surplus position – assets are higher than liabilities,  or in deficit – liabilities are higher than assets.”

Since 2022, the fund’s deficit hiked up from £446million to £518million.

But overall, the total contribution coming in from employers to address this deficit currently stands at 22.8 per cent – 2.5 per cent less than when the last valuation was carried out, the meeting heard.

Councillor Suzanne Cross (Ind, Bray) asked which employers will see the largest increase in their contributions.

Mr Drysdale said that academies are getting ‘quite a significant decrease’ with regard to how much they contribute to the fund.

He said: “We want to try and reduce that debt that would be there to be paid at the end by getting in more contribution rates now.

“Tier three employers, like housing associations, charities, colleges, have seen the biggest increase.

“They’re the ones that we’ve been in conversation with, about how to manage those increases because obviously that is tough. It’s not coming at an easy time and we appreciate that.”

But Cllr Asghar Majeed (Con, Ascot and Sunninghill) had concerns about the ‘very long’ three-year time period over which these contributions are set.

“We’ve got this crisis going on in the Middle East which is going to definitely affect inflation and everything else as well,” he said

“When will that be taken into account before you set the appropriate contributions [from employers]?”

Mr Drysdale explained that this is not the first time the pension fund has been faced with uncertainty in the market when it comes to the triennial valuation.

He said: “You know, we had this at COVID. It was obviously a big, really kind of volatile position in the market then.

“We’re looking to fund the scheme for a very, very long time. So when setting contribution rates, we have to look at the long-term position and try not to overreact to short-term fluctuations.