LGPS Email alert - Funding Strategy Statement 2025

2025 Funding Strategy Statement

Greater Manchester Pension Fund (GMPF) approved the final version of its Funding Strategy Statement at the 6 March 2026 Management Panel meeting.

The Funding Strategy Statement is available to view on GMPF’s website.

Regulation 58 of the LGPS Regulations 2013 requires each local government pension fund to prepare and maintain a Funding Strategy Statement. The Funding Strategy Statement provides guidance to the Fund’s Actuary in undertaking the actuarial valuation. The 2025 Actuarial Valuation Report is also available to view on GMPF’s website.

The purpose of the Funding Strategy Statement is to establish a clear, transparent fund-specific funding strategy that identifies how employers’ pension liabilities will be best met going forward. It also addresses other funding policies and matters.

Funding Strategy Statement Consultation Responses

GMPF issued a draft Funding Strategy Statement to employers in September 2025 for consultation and received seven formal responses. GMPF considered all comments and suggestions received and subsequently amended some policies and the corresponding sections in the Funding Strategy Statement.

The responses covered some similar themes, as set out in the table below, along with GMPF’s response:

Consultation response theme	GMPF Response
Requests from employers to consider affordability when setting contributions and consider the feasibility of reducing employer contribution rates	Regulation 62 of the Local Government Pension Scheme Regulations governs how actuarial valuations are conducted and the requirements that LGPS funds must meet. GMPF’s Funding Strategy Statement contains a commitment “to maintain the affordability of GMPF to employers as far as is reasonable over the longer term” within the ‘Aims of GMPF’s Funding Policy’ section of the Funding Strategy Statement. GMPF’s Funding Strategy recognises that there are several competing objectives, and it aims to balance these concerns wherever possible. Most employers will see reductions in the contribution rates. No employer will see an increase in their employer contribution rate at this valuation.
Requests for GMPF to reconsider, or amend, its approach to phasing contribution rate increases and decreases	Historically, GMPF has phased in contribution increases and decreases to aid in meeting the regulatory requirement of “maintaining as nearly constant a primary rate as possible”. However, given the robust funding positions of most employers at the 2025 valuation, GMPF has decided not to phase in contribution rate changes for participating employers in the new triennial period. All reductions are applied in full, from the first year of the triennial cycle. The specific wording around phasing of contributions will remain in the Funding Strategy Statement.
Allowing employers to fund strain costs from their sub fund if they are in a surplus position	Two responses to the Funding Strategy Statement consultation asked GMPF to consider allowing employers to fund their early retirement strain costs from their sub fund (the employer’s notional portion of assets) if their sub fund was in surplus as at the valuation date. Non-ill health early retirement strain costs largely arise from employer decisions and discretion, for example, when an employer waives the actuarial reductions for an employee’s early retirement. After considering this request, GMPF has determined not to allow non-ill health strain costs to be paid from the assets built up to pay for members’ pensions. Therefore, GMPF will continue to issue invoices for these types of strain costs going forward. Ill health early retirement strain costs are met automatically by the ill health funding arrangement. Most employers participate in GMPF’s ill health funding arrangement and so will not be invoiced for ill health strain costs.
Some participating multi academy trusts expressed concern that contribution rates in the academy sector diverged too much from one another, and this produced an inherent unfairness	As part of the 2025 actuarial valuation, GMPF has once again adopted consistent actuarial assumptions for all local authorities and academies, ensuring parity of treatment. The 2025 valuation has seen Part 1 & 2 Scheme Employers converge in their contribution rates. All certified contribution rates are available in the 2025 Valuation report on GMPF’s website.

Please do not hesitate to get in touch if you have any questions on the newly adopted Funding Strategy Statement. Please email your queries to employersupport@gmpf.org.uk.