Local Government Pension Scheme reform: Statement by the PLSA

The PLSA acknowledges there are often benefits to consolidation. The eight existing pools themselves are the product of the consolidation of assets of 86 local authority Funds in England and Wales.

In considering specific mergers, the interests of local authority pension scheme members should be paramount. For that reason, the PLSA advocates a process for considering pool mergers which is transparent, fair, evidence-led and fully costed.

Firstly, pools should not be penalised for adopting a business model which is different from the direction which is now proposed. As noted by the PLSA in its response to the Fit for the Future consultation, “LGPS Funds set out their pools according to the models that worked best and were most effective for them. Although some of them did opt for an FCA authorisation model, this was not a requirement set into regulation or statutory guidance”.

Secondly, the cost of changing the existing arrangements for investment needs to be acknowledged and weighed against any benefits. Again, the PLSA noted previously that FCA authorisation “will involve significant costs, resources and time”.

Thirdly, given the consequences of any decision, specific, quantifiable evidence should always be provided to demonstrate the value for money of a change in pooling structure, whether that is developing an existing model or requiring a merger.

The PLSA advocates continued dialogue between the affected pools and the Government to deliver solutions that are in the best interests of members.

ENDS

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]