Trade tariffs and impact on investment markets - what it means for our members and employers

We understand that our members and employers may be concerned about recent global market volatility and the impact this may have on the Fund and pension benefits.

Members of our Fund are part of the Local Government Pension Scheme – a defined benefit pension fund in which all members have benefits based on their service and salary.

These benefits are guaranteed and whether in payment now or in the future, the level of benefits is not affected by investment markets moving up and down.

Employers participating in the Fund pay contributions over time which are invested, alongside member contributions, to support in meeting the cost of benefits promised to their members and payable in the future. Market returns realised and anticipated in the future are considered in review of employer contributions, every three years, as part of each triennial actuarial valuation. The 2025 review will consider market events in context of healthy returns since 2022 and recent events, as part of a long-term funding strategy.

We will be issuing further information to our members and employers over the coming weeks, as we continue to support our members in saving and planning for retirement and our employers in reviewing the outlook for contributions over 2026-2029, through consultation planned this year.

What has caused the market volatility?

On 2nd April, the US unveiled a 10% "baseline" tariff on imports to the US, with higher rates faced by a number of countries across the globe. The level of tariffs were much larger than anticipated. This announcement, combined with the potential for retaliatory tariffs and generally increased uncertainty, has resulted in increased levels of volatility across investment markets.

How are the Fund’s investments affected?

Whilst at this stage, we do not know where and when markets may settle, the Fund maintains a diversified investment portfolio and is committed to ensuring the long-term sustainability of Scheme benefits helping us to withstand shorter-term market shocks. We continue to monitor and assess the situation, working with our partners and advisers to invest, protect and grow Fund assets over the long-term.

Where can members and employers go for further information?

Our planned April customer updates are being finalised for issue and will contain further information, relevant to our members and employers at this time.  There are no changes to the benefits promised and in payment to members as a result of the increase market volatility.  The employer contribution review will continue as planned with employer engagement throughout the year.

In the meantime, members can contact the Fund through a variety of channels.

Members who have put aside extra money into saving pots through Additional Voluntary Contributions (AVCs), can find further information and relevant links to information about their AVC arrangements by visiting Flexibility to pay more or less. We have contacted our AVC providers about the information available to support members at this time and will provide further updates once available.