TfL Pension Fund - 2021 Triennial Actuarial Valuation

My Ref: MRP 2/1

9th March 2022
Circular Num: NP/065/22

To: The Secretary All Branches, Regional Councils
All Underground and Former LT Employers

Dear Colleagues,

I can advise that following 31st March 2021 triennial actuarial valuation of the TfL Pension Fund the draft results reveal a surplus of £179 million with a funding level of 101.4%. This compares to a deficit of £603m recorded at the previous valuation 2018. This is clearly good news not just for members but also the employer and the Government who will not be burdened with having to pay deficit correction payments now the pension scheme is more than 100% funded.

However, while we are pleased with these results, I need to advise you that the surplus could be considerably greater if the actuary wasn’t taking such a prudent approach to the general assumptions used for the valuation. Indeed, the employer, TfL, is also of the opinion that the assumptions are far to prudent and has challenged the fund actuary and the trustee board in respect of this.

While it is true that actuarial valuation assumptions should have an element of prudence it should be noted that if there is to much prudence this can end up over-stating liabilities and understating assets going forward. It is anticipated that if more optimistic assumptions were used for this valuation, such as more positive Discount Rate (expected returns on investments), the surplus could be as much as £330m.

Such a surplus would go along way of cementing the future of the TfL Pension Fund and send a clear message to those who are currently attacking our members deferred wages that this occupational pension arrangement does not need changing.

However, despite the surplus of £179m being lower than we believe it should be we still maintain that the TfL Pension Fund is in excellent shape and again demonstrates that the purpose of the current Pension Review is to make our members poorer in retirement at the expense of making the bosses richer.

Furthermore, even if we accept the extremely conservative assumptions used for this valuation TfL will save £60 million pounds a year in contributions. It is muted that these savings would increase to at least £70 million pounds if the more optimistic TfL assumptions were adopted.

The attack on your pensions is not only unacceptable but it is also unnecessary and this union will not hesitate in putting on more industrial action if TfL does not withdraw their plans to impoverish you in your retirement.

I will keep you informed of any developments.

Yours sincerely

Michael Lynch
General Secretary