The Islington Pension Fund has announced a surplus of £215 million, according to the latest actuarial valuation presented at the Islington Pensions Board meeting on 16 December 2025. This positive financial position means the fund's assets exceed its liabilities, marking a significant milestone for the council's pension scheme.

The fund's actuary calculated the long-term average future employer contribution rate for the whole fund to be 16.0% of pensionable pay, with a funding level of 112%. Based on the adopted parameters, the total required contribution rate for the council is expected to reduce by approximately 5-6% per annum of pay. This reduction will have a positive impact on Islington Council's budget and services.

It is also expected that funding positions for a number of employers will show a surplus position and thus no further deficit contributions payable (with falls in the primary contribution rate also expected subject to changes in membership profile). The extent to which employers will benefit from surplus offsets, will depend on whether their funding level exceeds 110%.

This positive outlook is attributed to a combination of factors.

Key actuarial assumptions underpinning the valuation include:

  • Discount rate: CPI+2.8% (past service) and CPI+2.25% (future service)
  • Inflation: A long-term rate of 2.6% per annum
  • Life Expectancy: Based on membership data provided by the Fund, and across the actuary's LGPS client base, and taking into account updates to national experience models, the proposed life expectancy assumptions serve to reduce both liabilities and the future service rate.

The board discussed a draft Funding Strategy Statement (FSS), which is required by the Local Government Pension Scheme Regulations 2013. The draft FSS is being prepared in line with updated guidance issued by the Scheme Advisory Board (SAB).

The board agreed that officers, with the Fund Actuary, should update the FSS for consultation with Employers admitted into the Islington Fund. The consultation with employers will take place between December and January 2026, and the key points to be covered include the proposed funding strategy assumptions and parameters. The results of the consultation will be reported to members at the March meeting.