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  • Louise Lau

    Louise Lau

    Associate and Actuary

  • What are the options to consider when helping employers manage the cost and funding of risk benefits? 


    Some protection benefits, such as ill-health retirement and death in service, can have an immediate strain on a Local Government Pension Scheme (LGPS) Fund, unless steps have already been taken to meet an estimate of these costs.

    Most LGPS Funds will have made some provision for these costs, and assumptions will be used to forecast the incidence of such risks and this will be reflected in the contribution costs. However, the amount set aside may not always equal the actual cost, which means any excess would need additional funding.

    Although relatively rare, ill-health retirement and death in service can still be costly, especially for small or medium-sized employers.

    "It is important, therefore, that Funds have a policy to deal with these risks and to avoid employer challenge or default. The 2022 valuation is a good opportunity to put a policy in place."

    Managing the costs of risk benefits in the LGPS

    In this briefing note we explore possible options for LGPS funds to help employers manage the cost and funding of ill-health retirement and death in service benefits.

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