The Local Government Pension Scheme (LGPS) is one of the largest defined benefit (DB) schemes in the world and is the largest DB scheme in England and Wales, with over 11,000 employers, 5m members and assets of £217bn.
The Scheme is administered locally by 101 administering authorities. Over 70% of these funds are members of the Pensions and Lifetime Savings Association.
Following wide-ranging reforms to Public Service Pensions, the new career average LGPS came into effect from April 2014. One of the requirements of the new Scheme was for a Scheme Advisory Board to provide Government with advice on changes to the Scheme. The Pensions and Lifetime Savings Association is represented on the Board by Joe Dabrowski, our Head of Governance and Investment (Advisor Member).
In July 2015 the Chancellor announced that the Government would work with administering authorities to pool their investments in order to reduce costs whilst maintaining overall investment performance. In 2016 the Government 'revoked and replaced' LGPS 2009 investment regulations and set out detailed criteria for the pools as well as backstop legislation which will ensure that “those administering authorities that do not come forward with sufficiently ambitious proposals are required to pool investments.” 8 pools have since submitted detailed proposals and the Government has been monitoring progress towards the pools meeting these criteria.
The Scheme Advisory Board and the Pensions and Lifetime Savings Association will be working hard to ensure that these proposals generate the right outcome for the Scheme and their members, and avoid unintended consequences. It is critical that any changes complement existing work on managing deficits and improving the governance of the Scheme as a whole.
All issues affecting the LGPS are discussed by our Local Authority members at our Local Authority Forum in November and our industry-leading Local Authority Conference each May.
Please get in touch with us on our LGPS policy by contacting Tiffany.Tsang@plsa.co.uk.
LGPS Advisory Board