Viscount Younger of Leckie (Con)

My Lords, even with policy areas as complex as public service pensions, we readily acknowledge that different measures and benchmarks can produce materially different outcomes. Given the scale, duration and complexity of the LGPS, it is surely reasonable to expect those comparisons to be made explicit, so I would welcome the Minister’s reflection on that point. My third amendment relates to the treatment of surplus. In a growing number of funds, funding levels now exceed 150%, yet employer contribution rates often remain high, surplus is not meaningfully released, and employers are sometimes required to inject fresh cash to meet strain costs—even when substantial excess assets are already being held. There is currently no public interest test governing these decisions; as a result, surplus can become effectively trapped, while councils face rising costs and local taxpayers face higher council tax bills. This amendment would not mandate the release of surplus or weaken member security; it would simply require administering authorities to publish and justify their policy on contribution flexibility and the use of surplus, where funds are materially overfunded, and, crucially, to explain how they have balanced prudence, affordability and the interests of taxpayers. Requiring authorities to give reasons when surplus is retained as a matter of principle is, I believe, a modest step, but it is also a necessary one if we are serious about transparency, proportionality and accountability in the stewardship of public money. Let me be clear: the 120% funding level refenced in this amendment is not intended to prevent councils or admitted bodies from reducing surplus through lower employer contributions. It is a signalling threshold, one that identifies funds where surplus is clearly material and where policies on its use should be made explicit and open to scrutiny. I turn to my fourth amendment, which concerns transparency, accountability and actuarial assumptions. Actuarial judgments now determine billions of pounds-worth of public expenditure, yet transparency remains pretty limited. Consistency is weak and changes in assumptions are too often left unexplained. In practice, the actuaries’ view has become decisive but rather opaque; assumptions harden over time, the impact on contributions is insufficiently set out, and there is no clear or consistent standard of proportionality. I fully accept that the Minister cannot comment on the specifics of a case that he has not seen. However, in the interests of the Committee I wish to share a further example raised with the shadow team by an admitted body within the Local Government Pensions Scheme—and this example is, mercifully, relatively straightforward. That body recently received its valuation results as at 31 March 2025, and the results show the following. Its section of the fund was in surplus, as at 31 March 2022; both the funding level and the surplus in cash terms have increased since then and are larger at 31 March 2025, yet employer contributions are set to increase from 1 April 2026.