Public sector pension fund posts healthy investment returns amid cash flow concerns

Richard Youle, local democracy reporter

The value of a Swansea public sector pension fund rose by just over £153m last financial year but it’s now paying out more in benefits than it’s receiving in contributions.

The City and County of Swansea pension fund was worth £3.47bn at the end of March 2025 compared to £3.32bn a year previously, according to the latest set of accounts.

The fund has 55 contributing organisations, including Swansea and Neath Port Talbot councils, and has money invested in various financial products overseas and the UK.

A report before the Swansea local pension board, which helps ensure compliance and protect members’ interests, said investment returns totalled £168.1m in 2024-25 – the equivalent of just over 5%, or £460,797 per day.

Jeffrey Dong, the council’s deputy chief finance officer, described these returns as healthy and a very pleasing set of financial statements at a board meeting.

But the £168.1m investment returns were rounded down to a final increase in the fund’s value of £153.7m. Mr Dong said this was because it was paying out more in benefits than it was collecting in contributions.

Mr Dong said this was a change from previous years and the “cash flow negative” fund needed its investments to meet future liabilities. “Our investment strategy has changed accordingly,” he said.

Ageing population

The report before the board said there were 22,357 contributors to the pension fund at the end of March 2025 and 17,001 pensioners and 12,418 deferred pensioners. This to some extent reflects an ageing population.

The value of the fund has climbed steadily from £1.51bn in 2015-16 with the largest annual increase in 2020-21 when more than £600m was added.

Five years ago a commitment was made for the fund to achieve a net-zero carbon position in its investment portfolio by 2037.