Following the Chancellor of the Exchequer’s announcement of plans for further reform in the LGPS, the government launched a consultation on 14 November 2024 which focusses on LGPS asset pooling, local investment and governance.
The consultation includes the following proposals:
- all asset pools would be required to become Financial Conduct Authority (FCA) regulated entities, capable of managing assets internally and providing investment advice to their LGPS partner funds (5 out of the 8 current pools are authorised and regulated by the FCA)
- LGPS pension funds would retain responsibility for setting their strategic asset allocation but must fully delegate the implementation of their investment strategy to their pool and take their principal advice on investment strategy from the pool
- funds must transfer legacy assets to their pool’s management
- LGPS funds would be required to set out their approach to local investment in their Investment Strategy Statement and work with Combined Authorities, Mayoral Combined Authorities, Combined County Authorities, and the Greater London Authority in regional growth and development to identify investment opportunities, with the pools doing the due diligence on any potential investments
- funds would be required to publish a governance and training policy (including a conflicts of interest policy) and an administration strategy, to appoint a senior LGPS officer and to undertake independent biennial governance reviews to consider whether funds are fully equipped to fulfil their responsibilities
Stakeholders in the LGPS may wish to review the proposals in the consultation and consider if they wish to respond.
Go to the consultation
The consultation closes on 16 January 2025.