November 2017

The Scheme Advisory Board met on 16th November 2017.

The main action points and agreements included: -


The secretariat planned to develop guidance to cover communication between investment managers and prospective default retail LGPS clients, The guidance will be co-authored by the Investment Association and legal advisors.

SAB 2017/18 budget/levy

The Board agreed that a small increase in the levy should be recommended to the Minister for approval


The Board agreed that a letter from the Chair should be sent to the Local Government Minister and the Chief Secretary to the Treasury. This letter would recommend a move to equalisation of future post-retirement benefits and outline plans to begin pre-emptive work on the cost of back dating following recent judgements. In addition, support would be sought from other public service pension scheme advisory boards.

Academies/3rd tier employers’ project – update and next steps

Following the PwC report, the academies project had entered into its second stage. Following discussion with DCLG and DfE a proposal was made and agreed to form two working groups, administration and funding, based on the high level objectives agreed by the Board.

The 3rd tier project work on identifying issues with stakeholders had been awarded to Aon Hewitt. Interviews and surveys are underway and an interim report to the Board is expected at the next meeting in the first quarter of 2018.

Cost Management Benefit Design and Administration (CMBDA) committee update

SAB cost management assumptions

The Board noted the recommendations made by the Committee on the assumptions needed for the Board’s 2016 cost management mechanism valuation. All recommendations made were agreed by the Board apart from pay growth, discount rate and 50/50 take up rate. These would be further considered by the Chair of the Committee assisted by the Board’s actuarial adviser.

Late Retirement Factors

A letter had been drafted for the Minister regarding the application of late retirement factors and the Chair of the committee was given delegated authority to finalise and send on behalf of the Board.

50/50 survey

The results of the 50/50 survey indicated that there appeared to be a general lack of awareness of the option among those completing the survey. It was agreed that a campaign to raise awareness and increase take up be implemented during 2018.

Single stage IDRP arrangement

The Committee had agreed not to recommend any change from the existing two stage IDRP arrangement but to invite the Board to agree to work being undertaken to examine ways in which the current arrangement could be improved and streamlined.

Ill-health working group

The Committee had agreed that the working group should be re-convened and report back to the Board in 2018. Investment, Governance and Engagement Committee

Responsible Investment guidance

It was agreed that once a draft of the guidance on responsible investment was complete it should be sent to administering authorities for comment.

Cost Transparency/Procurement working group

Over 25 investment managers had signed up to the LGPS Code of Transparency, and the FCA’s Institutional Disclosure Working Group IDWG had begun working on a template to cover all institutional investors using the LGPS as a basis for development.

The procurement working group had met and drafted a time plan for procuring a third party service, for compliance checking which aims to agree a specification by the second quarter of 2018 and commence the procurement process in the third quarter.