PLSA Chair Richard Butcher welcomes members to our 2019 Local Authority conference, setting out the PLSA view on the key themes for the conference and looking ahead to an exciting and varied programme.
Good morning ladies and gentlemen and welcome to the 2019 PLSA Local Authority Conference: Cost and complexities - governing the LGPS.
Today the programme really gets underway after yesterday’s specialist sessions on alternative credit, property and climate change – and this morning’s birdwatching, a new addition to the PLSA conference experience.
You represent a £312 billion scheme with over 14,000 employers and 6.1 million members – just up by 500,000 in a single year – who provide local services and contribute to 101 funds. 89 of those are putting their assets into 8 investment pools as part of an ongoing process of reform which has lasted most of the last decade.
The LGPS is powerful and it’s complex.
You face all of the investment, administration and tax issues that challenge the UK pensions system as a whole. And you have unique issues in governance, membership and costs that no other scheme faces.
It has been over a year since the pools came into existence, but so much remains to do.
You’re waiting for statutory guidance from the Ministry of Housing, Communities and Local Government to chart the next steps on a wide range of issues:
- governance and reporting,
- the transition of assets,
- the relationship between pools and funds,
- accountability for investment strategy,
- costs and more importantly value for money – recognising that many funds deliver that today.
You need clarity, but you also need flexibility. You need to manage your assets in a way that works for you within pools of different sizes that have grown differently and which will need scope to innovate.
We understand the challenge and it’s reflected in the conference programme.
Minister for Local Government Rishi Sunak returns and will give you an update on pooling from the government’s point of view.
Tomorrow’s session on pooling governance will help us sharpen our list of wants from his department when it comes to guidance – while today’s stream session on diverse perspectives will help you get the most from your fund governance.
Relationships between the scheme and authorities and between the funds and TPR are another key part of the governance picture – and they’re on the programme.
Rishi will also talk about the Fair Deal, on which the government has made some excellent recent progress – but again there are challenges ahead: on benefits calculation and employer status.
The panel following Rishi will set them out, and there’s a stream session later today.
We know there is more for you to do, at a time when you have less to do it with. Between last year’s conference and this, we’ve published guidance to help you with resourcing, recruitment and retention. We’ll be looking at how else we can help.
Because partnership across the sector is key to success. Proof of that is the Cost Transparency Initiative or CTI.
Local Authority funds have pioneered transparent reporting of investment costs and the work of the PLSA, Local Government Association and Investment Association to build on that and the work of the IDWG will make a difference across the sector.
Next week the CTI will launch its new templates and guidance, piloted with a range of funds and managers: you can hear more, including the experience of the West Midlands fund, later today.
And looking at where you invest, impact investing, disruptive tech and social housing and infrastructure are on the agenda: with our first ever student debate at an LA conference.
The move from triennial to quadrennial valuations, the potential breaches of the cost cap ceiling and floor and the forthcoming pensions dashboard, will all be explored too.
And this is happening against the backdrop of a complicated political and economic environment.
Brexit, climate change, data, our ageing society and the always-dynamic financial markets are all critical global issues with a local impact.
They’re all on your agenda as complex and influential funds and investors. So they’re all on our agenda for the next couple of days.
We pack an extraordinary amount into this conference and we do it because our Local Authority membership is one of the cornerstones of our strength as an association.
So I hope you enjoy the next couple of days. Please remember to use the conference app to build your schedule and give us feedback.
And if you’re tweeting use #LAConf19.