8th June 2020 - Summary of Supreme Court boycotts case

This summary was drafted with the assistance of the Board's legal adviser in order to attempt to clarify the impact of the judgement in the case of Palestine Solidarity Campaign and another v Secretary of State for Housing Communities and Local Government on LGPS administering authorities. The summary concludes that the fundamental duties and responsibilities of authorities are not altered by the judgement, in particular that authorities remain responsible for investment decisions. 

Should the authority wish to consider non financial factors in its investment decisions it may do so taking into account the requirements of the guidance including the potential financial impact and the views of members. Such consideration may legally result in boycotts or disinvestment should the authority decide to take such action.

The summary represents the views of the SAB and does not constitute legal advice nor should it be relied upon or treated as a substitute for specific legal advice relevant to particular circumstances.

(Summary, Supreme Court decision on LGPS investment guidance, pdf 5 pages 190kb)

30 April 2018 - Scheme Employer Wholly Owned Companies - Opinion of James Goudie QC

Leading Counsel was asked to advise in consultation and in writing on a number of questions and in general covering Fair Deal, TUPE legislation, Automatic Enrolment legislation and employer groups:

(Opinion, Scheme Employer Wholly Owned Companies, pdf 9 pages 202kb)

16th November 2017 - Summary of the role of non financial considerations in LGPS investment

The Scheme Advisory Board agreed at its meeting on the 16th November 2017 that in the wake of recent legal judgements, a statement on the legal landscape relating to the impact of non-financial considerations on investment decisions should be published. A copy of the document to assist those advising on or making investment decisions can be found here:

Summary of legal opinions and judgements on the role of non financial considerations pdf 12 pages 323kb

18 October 2016 - Legal position of LGPS in relation to the FCA - Opinion of Nigel Griffin QC

The Local Government Association (“the LGA”) instructed Nigel Giffin QC to provide opinion on the issue concerning the extent to which a local authority or other body which is the administering authority of a fund established for the purposes of the Local Government Pension Scheme (“LGPS”) might in that connection be subject to regulation by the Financial Conduct Authority (“FCA”) pursuant to the Financial Services and Markets Act 2000 (“FSMA”).

(Opinion, Legal position of LGPS FCA Opinion - of Nigel Griffin QC, pdf 12 pages 105kb)

Mr Griffin concluded that:

In managing an LGPS fund, the administering authority is not carrying on a regulated activity, and does not require FSMA authorisation. Nor do the substantive provisions of CASS apply to the activities of an administering authority acting as such, even though that authority may have FSMA authorisation for some other reason.

25 January 2015 - Legal position of local pension boards - Opinion of James Goudie QC

A number of stakeholders have raised question regarding the legal status of local pension boards in particular their legal relationship with the authority acting as scheme manager. Accordingly LGA approached James Goudie QC for a view against the following questions.

1. The legal status of an LGPS Pension Board

2. The legal relationship between the Pension Board and the LGPS Administering Authority (i.e. Scheme Manager)

3. Whether there is a conflict between the requirements of the 1972 Act and the 2013 Act with regard to membership of Section 5(7) Combined Committee Boards?

4. Generally on any other issues relevant to this matter

(Opinion, Legal position of local pension boards, PDF 204kb)

In his opinion, Mr Goudie concluded that:-

1. Local pension boards are constituted entirely under the Public Service Pensions Act 2013 and are not local authority committees. He goes on to point out some of the practical difficulties that arise from this view such as access to council officers and indemnity insurance cover.

2. In his view the relationship is entirely that set out in the PSP Act 2013.

3. There are conflicts between 1972 Act and the 2013 Act but they are not mutually exclusive and it is possible for a combined committee/board to exist however in his view ‘An administering authority should think long and hard before choosing to go down the combined role route’.

4. The advice then goes on to point out the difficulties in this area in particular his view that a pensions committee with investment decision making powers is a finance committee and is therefore restricted in its membership.

The opinion was adopted by the Board at the meeting of 25th January. The Board will review their guidance on pension boards and scheme managers are advised to review their pension board arrangements having regard to this opinion

22 January 2015 - Responsibility for benefits and IORP - Opinion of Nigel Giffen QC


The Shadow Scheme Advisory Board for the Local Government Pension Scheme (LGPS) in England and Wales was established in July 2013. It is the forerunner to the Local Government Pension Scheme Advisory Board, which is established under Section 7 of the Public Service Pensions Act 2013. The Board has been set up prior to the formalisation of the regulations setting out the formal remit of the Scheme Advisory Board, which are expected to come into force in early 2015.

Last year, the Board sought and published advice from Counsel on fiduciary duty in the LGPS, Following this, further advice has been commissioned to cover:

  • confirmation of the requirement to meet benefit payments separate from the status of funds; and
  • the interaction between the LGPS and the EU Institutions for Occupational Retirement Provision (IORP) Directive 2003.

(Opinion, Finance and Regulation of the LGPS, PDF 180KB)

The benefit 'guarantee'

The generally accepted position in the LGPS was that the Administering Authority was required to meet benefit payments on a statutory basis regardless of the circumstances of the fund it operates. In the event, Nigel Giffin QC finds that the assumed position above is not reflected in the regulations resulting in a potential (if extremely unlikely given the strength of local government finance requirements) circumstance of there being an uncertainty around benefit payments should the funds be unable to meet them.

Such a situation, however unlikely, is in the Board's view untenable and therefore the Board will be asking DCLG to amend regulations in order to clarify the requirement for administering authorities to pay benefits on a statutory basis.


In Counsel's view the requirements of article 8 (which sets out that there should be legal separations between sponsoring employers and pension schemes) are met by the regulations but he accepts that regulations could be more explicit on the use of fund monies and that model structures such as South Yorkshire present no possible issues for compliance. The Board will continue to look at the issue of separation between fund and authority and will consider the content of this opinion as part of that work.

In terms of article 18 (which details how investments should be made in institutions for occupational retirement provision), Counsel makes some suggestions to strengthen regulations to ensure full compliance but reminds Administering Authorities that they should act in accordance with the Directive regardless of the current state of the regulations. The Board will be making recommendations to DCLG for changes to investment regulations which take on board this opinion to ensure that the relevant parts of Article 18 are adopted, reflecting the legal views provided by the Law Commission and Michael Furness QC.

(Commentary on Finance and Regulation Opinion, pdf 180KB)

22 January 2015

2 April 2014 - Advice on Fiduciary Duty in the LGPS - Opinion of Nigel Giffen QC

The Local Government Association on behalf of the LGPS Shadow Scheme Advisory Board instructed Mr Nigel Giffin QC in the matter of:

I. Does an LGPS administering authority owe a fiduciary duty and if so to whom it is owed?
II. How should the wider functions, aims or objectives of the administering authority influence the discharge of its LGPS investment duties

(Opinion, Fiduciary Duty with regard to the investment of LGPS funds, pdf 108KB)

He has now produced his advice. His conclusions were

1. In managing an LGPS fund, the administering authority has both fiduciary duties and public law duties (which are in practice likely to come to much the same thing).
  This conclusion is clarified in the body of the opinion in paragraph 6 as follows:In my view the administering authority does owe fiduciary duties, both to the scheme employers, and to the scheme members
2. The administering authority’s power of investment must be exercised for investment purposes, and not for any wider purposes. Investment decisions must therefore be directed towards achieving a wide variety of suitable investments, and to what is best for the financial position of the fund (balancing risk and return in the normal way).
3. However, so long as that remains true, the precise choice of investment may be influenced by wider social, ethical or environmental considerations, so long as that does not risk material financial detriment to the fund. In taking account of any such considerations, the administering authority may not prefer its own particular interests to those of other scheme employers, and should not seek to impose its particular views where those would not be widely shared by scheme employers and members (nor may other scheme employers impose their views upon the administering authority).

So for example, in our view, an administering authority may choose to take into account the public health implications of tobacco investment but only if the result of such consideration is the replacement of these investments with assets producing a similar return.

Alternatively, in our view, an administering authority may take account of social housing needs but only if an investment in such stands up as an investment in its own right and can demonstrate that it is not preferring its own interests over other scheme employers in making the investment.

Furthermore, in our view, in making such decisions the administering authority cannot impose its view (on this or any other issue) on scheme employers nor can scheme employers impose their view on the administering authority if either resulted in a material risk to the return to and/or a suitable balance of assets in the fund.

2 April 2014