Croydon Council's Pension Board has reviewed initial results from the 2025 valuation of the pension fund, suggesting employer contribution rates could be reduced by 3%. The recommendation comes after the fund's financial health improved significantly due to changes in the economic environment since the 2022 valuation date, resulting in a funding level of 132% as of 31 March 2025.
The Pension Board Agenda from the meeting on Thursday 13 November 2025, included discussion of the progress of the triennial valuation of the Croydon Pension Fund, effective from 31 March 2025.
According to the Croydon Pension Fund - 2025 Valuation Initial Results and Funding Strategy Statement Update, the Fund actuary has recommended that contribution rates for Croydon Council could be reduced immediately from 23.2% of pay per year to 20.2% of pay per year. This 3% reduction in employer contribution rates will have a positive impact on Croydon Council's budget.
This recommendation is based on the improved funding level, which increased from 97% at the last valuation to 132% as of March 31, 2025. This is based on assumed future investment returns of 5.9% per year. The report pack notes that the actuary had reviewed the funding assumptions as part of the 2025 valuation, and that these had been updated to reflect emerging experience and market conditions as at 31 March 2025.
The initial results of the 2025 valuation for the whole Fund were also noted. A key output of the valuation is a measurement of past service liabilities at the valuation date to determine the funding level. The following table was included in the report pack:
| Valuation Date | 31 March 2025 | 31 March 2022 |
|---|---|---|
| Past Service Liabilities | (£m) | (£m) |
| Employees | 386 | 520 |
| Deferred Pensioners | 325 | 459 |
| Pensioners | 772 | 811 |
| Total Liabilities | 1,483 | 1,790 |
| Assets | 1,963 | 1,731 |
| Surplus/(Deficit) | 480 | (59) |
| Funding Level | 132% | 97% |
The draft Funding Strategy Statement (FSS) was approved by the Pension Committee on 16 September 2025, and will be issued to participating employers for consultation, alongside their individual valuation results. Following the end of the consultation period, any comments received may lead to amendments to the document. The Committee will then be asked to approve the final version of the FSS at its March 2026 meeting thus allowing the Actuary to sign off the final valuation report in time for the statutory deadline of 31 March 2026.
The 2025 Valuation Initial Results and Funding Strategy Statement Update report noted that updated guidance for preparing and maintaining a Funding Strategy Statement was published in January 2025 by the Ministry of Housing, Communities and Local Government (MHCLG), the Scheme Advisory Board’s Compliance and Reporting Committee, and the Chartered Institute of Public Finance and Accountancy (CIPFA). It replaces the 2016 guidance produced by CIPFA.
