In line with our Corporate Plan, the primary objective of the Fund is to provide benefits for members on their retirement and to their beneficiaries. Critical to this objective is being able to assess the cost of such benefits (liabilities) both now and in the future.
As such, the Fund has developed and maintains an integrated approach to funding strategy and risk management, supporting the Fund in meeting our regulatory funding requirements with a balance achieved though consideration of risk. The three key elements of this approach are funding, investment and employer covenant and are reviewed in tandem as part of each triennial review. These pages focus upon funding and employer covenant:
Funding strategy focuses on how employer liabilities are measured, the pace at which these liabilities are funded, together with how employers pay contributions to ensure their own liabilities are fully funded.
Employer covenant is an employer’s legal obligation and ability to fund the scheme now and in the future. The Fund has in place a framework to monitor the covenant of all of its participating employers. This is with a view to mitigating the risk exposure of all employers in the event of the failure, wind-up or cessation of a scheme employer with an unpaid funding deficit.
The Fund regularly engages with key stakeholders, primarily our participating employers, on these elements, to include formal consultation on the funding strategy statement at each actuarial valuation.
Role of the Fund actuary
Members pay contributions to the Fund, which combined with investment returns cover a proportion of the cost of member benefits, and with any shortfall being met via contributions paid by employers. After considering investment returns and other factors such as the profile of the membership, the Fund actuary confirms the contributions payable by employers actively participating in the Fund.
The Fund actuary provides the following:
- a statutory, full actuarial valuation every 3 years and ongoing monitoring of the solvency of the Fund
- confirmation of contribution rates for each employer, including those on entry and exit, and where applicable bond requirements.
- advice and calculations in connection with bulk transfers and the funding aspects of individual benefit-related matters such as pension strain costs, ill-health retirement costs, compensatory costs, etc.
- assisting the Fund in assessing whether employer contributions need to be revised between valuations as permitted or required by the regulations
2022 Actuarial Valuation
Results of the 2022 actuarial valuation have now been finalised and communicated to all participating employers. More information can be found in the associated valuation report below along with supporting policies, including the Funding Strategy Statement (FSS). For employers with queries about the valuation or funding matters, please contact the Employer Services Team via our dedicated mailbox WMPFEmployerValuation@wolverhampton.gov.uk