Navigating a demanding year for the LGPS

The LGPS faces numerous significant challenges, many emanating from new rules and guidance. The PLSA’s Tiffany Tsang outlines what to expect on these issues at October’s Annual Conference.

It’s been quite a year for the Local Government Pension Scheme (LGPS) – and there is a great deal of uncertainty about what the remainder of the year will hold.

The government’s planned wide-ranging “levelling up” consultation on the LGPS was trailed at our Local Authority Conference in June, but the Conservative Party leadership race has delayed its publication.

At the Pensions and Lifetime Savings Association, the issues facing the LGPS are a key regulatory focus. We want to help funds get ahead of expected new rules and to create opportunities to share the latest thinking on investment, sustainability, governance, data, and more.

Our Annual Conference takes place on 11-13 October in Liverpool, and speakers will cover a wide range of topics of potential interest to LGPS funds.

Levelling Up debates and Responsible Investment continue to dominate the investment agenda, so look out for opportunities to discuss real assets investing, which may contribute to your thinking on your approach to asset classes such as local infrastructure and social housing.

Similarly, asset pooling remains a priority, and we await with interest the government’s latest guidance on this – expected imminently as part of the wider LGPS consultation. A clear and open dialogue between funds, pools, and government – which the PLSA will help to facilitate – is essential to ensure that pooling continues to be a success and benefits members.

Defining sustainable investment

Understanding the nature of environmental, social, and governance (ESG) exposures is essential to the detailed reporting that is set to apply to LGPS funds as a result of the consultation released on 1 September.

The largest corporate schemes have been required to report on their impact on the world’s climate in line with the recommendations of the Task Force on Climate-related Financial Disclosures since October last year. However, whether public or private sector, deciding what qualifies as an ESG or ‘green’ asset is a challenge.

The UK is working on a ‘green taxonomy’, expected to be published this year, to help investors understand what qualifies as a green investment. In Liverpool, the PLSA’s Joe Dabrowski will lead the discussion on how schemes can approach the new green taxonomy at 4:30pm on 12 October in the Main Auditorium.

Pension Dashboards

Next year, pension schemes will be expected to have their data and systems ready to feed information to new pensions dashboards. This ambitious project has the potential to transform how people view their savings.

Given other significant administrative burdens facing the LGPS – most notably the McCloud age discrimination issue – meeting the 2024 deadline will present a significant challenge to all LGPS administrators.

Fortunately, Chris Curry of the Money and Pensions Service – which is overseeing the Pensions Dashboards Project – will be in Liverpool to discuss the latest developments with the PLSA’s Nigel Peaple and Richard Smith at 12:05pm on 12 October in the Main Auditorium.

Our networking opportunities will also be a perfect place to discuss implementation issues with other public and private sector pension schemes and find out how they are approaching this challenge.

As attendees at the Local Authority Conference will testify, collaboration and cohesiveness across the LGPS continue to be clear priorities. Complex regulatory frameworks that can lead to differing interpretations of ways forward are a barrier to these goals, as the PLSA outlined in our recent LGPS report, but one that can be overcome in time through continuing the work the PLSA does with government and regulators to ensure a greater understanding from external stakeholders of the unique challenges facing the LGPS.

At the PLSA, we have a vision for a pensions system that helps everyone achieve an adequate income in retirement – and the LGPS as a vital part of this for millions of people across the UK, many of whom provide crucial roles of support and care to help local communities to thrive. Join us in October to share ideas and network with peers to help us make this vision a reality.

Find out more about the Annual Conference and book your place here. See you in Liverpool!