One thing in our industry doesn’t change. And that’s the amount of time we spend on change: talking about it, dealing with it, planning it. The local authority funds that make up the Local Government Pension Scheme know that better than most. McCloud, employer exit payments, pooling governance, public sector resource pressures, political change: you’re dealing with it every day. You’re performing under pressure.
And although it may feel more acute or more difficult at the moment, I don’t think there was ever a time without change, when your jobs were stable, predictable – even boring. Change is what gives the PLSA Local Authority Conference its purpose and value. For this community that’s about sharing different approaches to resolving the challenges you’re all dealing with. It’s about seeing and understanding the opportunities that those challenges might offer. And sometimes it can be about finding the best way to go through changes you might not want to make.
But whatever it is, taking advantage of it depends on the connections we make – between ideas, between people and between spheres of influence. And from the ICC in Birmingham, to the Belfry nearby, to the Cotswolds Water Park, to this digital platform – the PLSA has been bringing you together to make those connections since 2005.
If you were working in local authority pensions in 2005, would you have known what the landscape of the LGPS would be today? Of course, the same ever-present issues would have been influencing the direction of travel – resources, administration, governance, regulation. But that was well before the wave of change that began in 2014 with the switch to a career average scheme and the origins of pooling. And before the headache created by the McCloud judgement could even be imagined.
We’ve been speaking to you about the issues you’re dealing with today. And as you’d expect, we’re making connections. You’ve got concerns about your budgets after the pandemic. Budgets that had already been heavily cut in recent years. You’re worrying – as you have been for a few years – about talent management: how on earth you’re going to recruit or train the right people
to do some of the most complex jobs in pensions.
You’re wondering how and when you’re going to get absolute clarity from the government or the regulator on a list of guidance gaps and grey areas. And you’re trying to work out how to navigate the complexities of your governance and employer structures. But you’re looking to the future and asking how you can secure the long- term sustainability of your fund and the LGPS. And the PLSA is listening to you. We’re working together with you to make sure LGPS issues are recognised, and we’re going to act on what we’ve heard.
So this week we’re launching a new research project to look at the state of the nation and the future challenges for the LGPS. We’re going to look at the biggest of these issues: getting the guidance you need, attracting the talent you want, and reducing the burden of administration that holds you back. And we have four headline objectives:
- First, to develop a comprehensive understanding of the major issues and challenges facing the operation of the scheme
- Second, to establish a base of understanding to measure against in future years
- Thirdly, to identify best practices or gaps in effective operations
- And finally to identify if and where there is a need for the Government to intervene or alter its existing regulations.
We’ll be conducting roundtables, surveys, researching case studies and producing one of our biggest pieces of thought leading policy work for this year. We’ll be making the connections between everything you say so that everyone involved in the LGPS has the best possible shared understanding of the scheme today and the best possible chance of navigating its future.
THE PLSA IS YOUR PARTNER
The LGPS is unique, but it’s not alone.
One issue that connects all of us, in almost every area of life, is climate change. Our Changing Climate report – which we published last year – drew on our discussions with more than 80 pension industry representatives, including many from the LGPS. It showed an almost universal desire among pension funds to invest in a climate-aware way.
The LGPS has been leading the way on change, but we recognise your need for help and guidance. And shared understanding is key in this area too. That’s why we’re pleased to be a member of the Responsible Investment Advisory Group that was set up last year.
It’s acting as an editorial board for future editions of the online guidance, and as advisers to the Scheme Advisory Board on responsible investment. Through that group we’ll make it easier to understand evolving ESG matters and the implications for your fund, so you can take the action you need.
Another way that every pension fund and every saver will soon be connected is the pensions dashboard. As the UK’s biggest pension scheme, the LGPS will be the biggest data provider to dashboards, and the biggest upholder of data standards. The PLSA is making the LGPS part of the development of the pensions dashboards programme as we work to make sure the dashboard ecosystem works for our members.
The LGPS will also of course be part of the new single code of practice that the Pensions Regulator is consulting on. TPR says it received requests for a specific version of the code for the Local Government Pension Scheme. But it decided that would be impractical. And instead it asked LGPS funds to consider their own governance arrangements and where responsibilities sit within them.
To help, the PLSA has been speaking to you about the impact of the code, as well as carrying out research, and your views will be very much part of our consultation response. And later on, as the single code evolves and is implemented, you will need more clarification and guidance, which the PLSA will bring to you.
Issues like the dashboard and the single code are going to play a really major role in the challenges facing the LGPS and the future operations of your funds and your scheme.
That’s why it’s crucial that we look at the big picture, find the connections between your individual circumstances and make sure we know where we’re heading. That’s why they’re part of the comprehensive programme of roundtables and webinars we’ve put in place for you.
Many of the issues the PLSA works on for you are discussed at events. Many of the priorities we take forward are generated by the connections we make here.
We couldn’t hold this conference last year, but the LA Live event we held instead brought so many of you together and gave me and the PLSA team confidence in the value of digital events. After a year of learning, we’re back here – today, tomorrow, and on- demand afterwards.
So thank you for joining us. And thank you to all of the speakers, sponsors, exhibitors, and the PLSA team, who have all worked so hard to make this conference happen.
We look forward to working with you. And I hope you have a great conference!