What can we expect from the SHPS valuation 2023? - An action list for housing associations

SHPS valuation 2023 What can we expect from the SHPS valuation 2023? An action list for housing associations October 2023 Headlines The latest valuation of the Social Housing Pension Scheme (SHPS) will be carried out as at 30 September 2023: • We expect the overall SHPS deficit to have halved compared to three years ago on an ‘all-else-equal’ basis. [...] We have also seen huge reductions in the solvency deficit, Solvency deficit which is the key driver for exit debts – the circumstances for individual employers will vary, but on average we expect that the cost to associations of exiting SHPS will have reduced by more than half from 2020 levels. [...] UK 20-year gilt yield We saw a gradual reduction in long-term interest rates between We have 2011 and 2020 seen significant increases in UK long-term interest rates since the last triennial valuation of SHPS Source: LCP Visualise Sept Sept 2011 2020 2023 As a result of the changes shown above, over the last three years we have seen significant reductions in the present value of SHPS liabilities an. [...] The ongoing TPT benefit review and High Court case could add to SHPS liabilities (by up to c£100m or more) but we don’t expect to know the outcome of the court hearing until after this triennial valuation has concluded, and so any extra liabilities are likely to feed through to the 2026 valuation. [...] The firm is authorised and regulated by the Financial Conduct Authority and is licensed by the Institute and Faculty of Actuaries for a range of investment business activities.