30th May 2023
Audit issue 2021/22 – Pensions triennial valuations
Councils may be aware that the delay in finalising accounts for 2021/22 has meant that information from the March 2022 triennial valuations of pension funds has become available before the audit of many accounts has been signed-off. This has led some auditors to request that the accounts are re-done using this more up to date information.
Following discussions between stakeholders, last week the National Audit Office (NAO) issued supplementary guidance to auditors (guidance note SGN 3) and CIPFA issued supplementary guidance to accounts preparers (CIPFA Bulletin 14 Supplement). Taken together these make it clear that there is no need for the accounts to be re-stated using the triennial valuations, unless the original valuation in the accounts contained material omissions such as not taking account of an existing large-scale restructuring/redundancy programme. Hopefully, this will now prevent the issue of pension valuations adding further to the delays in finalising accounts.
‘McCloud’ remedy in the LGPS – supplementary issues and scheme regulations consultation
DLUHC has today launched a consultation that seeks views on changes to the Local Government Pension Scheme in England and Wales (LGPS). This follows a previous consultation that DLUHC undertook in 2020 on proposals to address discrimination found by the courts in the ‘McCloud’ case. The Court of Appeal ruled in 2018 that younger members of the judicial and firefighters’ pension schemes had been unlawfully discriminated against – known as the McCloud judgement. The Department published the government response in April 2023 confirming the steps it will be taking to resolve the McCloud age gap discrimination in respect of the LGPS in England and Wales.
DLUHC are now seeking views on issues relating to the McCloud remedy. This will cover reconsulting on some areas, and consulting on issues not covered in the first consultation. The department are also seeking views on draft scheme regulations (see annex A) which would implement the remedy. The consultation closes at 11:59pm on 30 June 2023.
26th May 2023
Update to Employer Flexibilities Guidance Documents
The Board has decided to withdraw the Example Deferred Debt Agreement (Schedule A) that was available on our website in the Employer Flexibilities Guidance section. It has come to our attention that the version uploaded was the wrong one and it may require revision. Any funds that are in the process of using the template to enter an agreement, or have used it as the basis for a legal agreement with a scheme employer, are advised to contact the SAB Secretariat email address to discuss what the outstanding issues are and whether any further action is necessary. A revised document should be uploaded again shortly, and a further updates will be provided once that is done.
23rd May 2023
Cost Transparency Roadshows
The Scheme Advisory Board has set up a series of free regional training sessions for Local Pension Board, Committee members and fund officers on investment cost transparency.
Sessions are being arranged in London, Bristol, Wolverhampton, Leeds, Manchester and Cardiff. These sessions will provide:
- An explanation of the purpose and background of the Board’s ground-breaking Code of Transparency
- a case study from an LGPS fund on how investment cost information has been used
- a troubleshooting session on how to use the online reporting system, run in conjunction with Byhiras (the system providers), and
- a facilitated discussion on the information that fund officers should be receiving and how this information should be reported to pension boards and committees.
Sharia Compliance Report Commissioned
The Board received legal advice which said that before an opinion could be given on whether LGPS was consistent with anti-discrimination and public sector equality duties, it was necessary to instruct an expert in Islamic finance to provide evidence on a range of issues from an Islamic perspective. The Board has now commissioned expert advice on this from Amanah Associates and their report is expected in about three months’ time. Once that report is received, the Board will be in a position to seek and share Counsel’s opinion on this matter.
Reform of Board Scheme Cost Assessment (SCA)
DLUHC has issued the final regulations and published its response to the consultation on reforming the SAB’s own parallel process for reviewing scheme cost. This is the process set out in Regulation 116 of the 2013 Regulations, which runs during the HM Treasury-led quadrennial scheme valuation process. The changes take into account SAB’s response to the consultation and better align the SCA with HMT’s reformed cost control mechanism (CCM).
It helpfully re-iterates that the SAB process operates prior to the HMT CCM and gives the SAB greater flexibility in the making of recommendations to the Secretary of State where there is a breach. However, it leaves open for further discussion the link with the new “economic check” in the CCM.
Climate risk reporting in the private sector – Review of first year reports
TPR have published a review of climate-related disclosures by occupational pension schemes. The paper sets out TPR’s preliminary observations and feedback to industry, based on their review of a selection of climate-related disclosures published by occupational pension schemes. The review relates to private pension schemes but contains observations which may be useful for LGPS funds ahead of the implementation of climate risk (TCFD) reporting in the LGPS – which is now expected to commence from 1 April 2024, with first reports due in late 2025.
12th April 2023 Treasury statement on SCAPE rate reduction and response to 2021 SCAPE consultation
Through a written ministerial statement from the Chief Secretary to the Treasury, the Government has announced that the Superannuation Contributions Adjusted for Past Experience (SCAPE) discount rate has been reduced to the consumer price index (CPI) plus 1.7 per cent. This is a reduction from the previous rate of CPI plus 2.4 per cent. The SCAPE discount rate is used to set the employer contribution rates in the unfunded public service pension schemes and determine the actuarial factors across all public sector schemes. The change takes effect from 30 March 2023 and the Government Actuary’s Department has already begun a review of actuarial factors applying in the LGPS. While that progresses, some non-club transfers and interfund calculations, and all CEVs for divorce purposes will need to be suspended until the new factors are issued. Detailed guidance on this has been circulated to administrators by LGPC.
The Government has also now published its response to the June 2021 consultation on the methodology used to set the SCAPE discount rate. It confirmed that the SCAPE rate will continue to be based on the expected long-term gross domestic product (GDP) growth figures. The Government also expressed an aim to review the level of the discount rate once per scheme valuation cycle (four years) rather than every five years.
6th April 2023 Sharia Compliance Report - Invitation to tender
The Board has received legal advice which suggests that it should instruct an expert in Islamic finance to provide evidence on a range of issues around Sharia Compliance in the LGPS. The Board has therefore issued this Request for Tender which calls for expert advice in this area. Interested parties can submit bids until 5pm on 9th May 2023.
Government responds to McCloud consultation
The Department for Levelling Up, Communities and Housing (DLUHC) has published their response to the consultation on amendments to the underpin. The consultation proposed changes to the underpin to address the discrimination found in the McCloud judgment and to ensure that it works effectively and consistently for all qualifying members. The consultation ended on 8 October 2020. Alongside the response, in collaboration with the Scheme Advisory Board, DLUHC published a factsheet summarising the remedy for members.
DLUHC expects to launch a further consultation this spring. The consultation will seek views on: issues that, because of the consultation responses, they have not yet made a final decision on (such as aggregation and flexible retirement), issues not included in the original consultation (such as compensation, interest and excess teacher service), and updated draft regulations. DLUHC will finalise the regulations after considering the responses to the further consultation. These will come into force on 1 October 2023, with backdated effect to 1 April 2014. You can access the consultation documents on the Scheme consultations page of www.lgpsregs.org.
4th April 2023 Climate risk reporting in the private sector – Review of first year reports
TPR have published a review of climate-related disclosures by occupational pension schemes. The paper sets out TPR’s preliminary observations and feedback to industry, based on their review of a selection of climate-related disclosures published by occupational pension schemes. The review relates to private pensions schemes but contains observations which may be useful for LGPS funds ahead of the implementation of TCFD reporting.
30th March 2023 SAB statement on Freedom of Information Act requests on climate advice and data
Some funds have raised with the Board the increasing prevalence of requests for information about the responsible investment policies of administering authorities. These may come from interested scheme members or activist groups and can be “round robin” requests that are made to all LGPS funds with a view to collating information across the scheme (and making comparisons between funds’ responses).
As public authorities, there are duties on all administering authorities to be open and transparent about their policies and actions. However, the resources available to deal with requests are not unlimited and there will be occasions where cost, commercial sensitivity or other considerations will outweigh the public interest in releasing information. Further guidance on this is available from the Information Commissioner’s Office. Support in how to respond to these requests, especially if they become onerous or vexatious, should be sought from the authority’s legal and FOI advisers.
If the new climate reporting duties had been brought in by the Government, as consulted on last year, from 1st April 2023 then that may have helped authorities currently considering the request from Carbon Tracker by putting, or at least having a plan to put, a large amount of information into the public domain which may have helped address some of the requests for information that are being received. Despite the delays in DLUHC concluding that consultation, the Board would recommend that all funds consider having a proactive publication scheme in place for climate data, and their stewardship activities, to minimise the volume of ad hoc requests that they have to field.
29th March 2023 GAD Gender Pensions Gap Report
The Gender Pay Gap Information Regulations 2017 put a requirement on employers with more than 250 employees to publish differences in pay between men and women. Analysis by the LGA in 2019 across local government employers indicated that there was a mean gender pay gap of 6.1% and a median gender pay gap of 4.0% amongst local government staff. While that is significant, it compared favourably to the economy as a whole, where the mean gap for 2021/22 was 9.7% and the median was 5.5%.
While there is a clear and obvious link between pension and pay equality, the Scheme Advisory Board decided to analyse the gender pensions gap in the Local Government Pension Scheme. This is because we do not expect differences in pay at any one point in time to be a complete explanation of differential pension incomes at retirement. For example, there are likely to be other variables which impact on pension benefit accrual, such as:
• The cumulative effect of lower than expected pay
• Career breaks and their effect on career progression
• Differences in opt out rates and take up of the 50/50 scheme
Research into the extent of the gender pensions gap was undertaken by the Government Actuary’s Department at the Board’s request using data from the 2020 scheme valuation. This has shown that the difference between men and women as to their accrued benefits in the Local Government Pension Scheme is 34.7% for benefits in the reformed CARE scheme and 46.4% for benefits in the legacy final salary scheme (in favour of men). The data also showed that the average pension in payment for a woman was £4,285 while for a man it was £8,466. These initial findings do need to be interpreted with some caution, though. The LGA pay gap analysis excludes all schools staff (and any other staff not directly employed by a Local Authority), while the gender pensions gap analysis includes data held on non-teaching staff working in schools, academies, further education colleges, some higher education institutions and many other non-Local Authority employers who can be employed under different terms and conditions. The Board will now be doing further work to understand the data and investigate causes, as well as considering possible next steps.
15th March 2023 Spring Budget - Changes to pensions taxation
The Chancellor has announced some changes to pensions taxation in the Spring Budget. The Annual Allowance (which is the maximum amount of pensions savings an individual can make each year before incurring a tax charge) will increase from £40,000 to £60,000 from 6 April 2023, with individuals continuing to be able to carry forward unused Annual Allowances from the three previous tax years. Changes have also been made to the Lifetime Allowance, the charge for which will be reduced to zero from 6 April 2023, before being fully abolishing in a future Finance Bill. Other changes were made to the Money Purchase Annual Allowance and Tapered Annual Allowance. More detail can be found in the Budget document and the Pension Tax Limits policy paper.
These changes will be welcomed by higher earners in the LGPS, as well as some middle-income earners with long local government careers who, before the recently announced change to the valuation date, were in danger of having to meet Annual Allowance charges for the first time due to the effect of high inflation rates. However, it should be remembered that the majority of LGPS members will not be affected by these changes and that the average LGPS pension in payment is only around £5,000 per annum.
13th March 2023 Publication of Fire Brigades Union vs HM Treasury Cost Control Mechanism Judicial Review
The full judgment in the Fire Brigades Union vs HM Treasury Cost Control Mechanism Judicial Review has now been published. The High Court ruled in favour of HM Treasury on all grounds. The judge also refused permission to appeal, but the FBU and other parties are able to apply for permission to appeal directly to the Court of Appeal. The full judgment can be read here.
6th March 2023 SAB submits its response to DLUHC’s cost management process consultation
SAB has submitted its response to the DLUHC consultation on reforms to the SAB scheme cost assessment process, which closes on 24th March 2023. The SAB scheme cost assessment is the part of the cost management process which operates independently of, and prior to, the HM Treasury directed cost management process. The response is generally supportive of the Department’s approach as they have taken on board many of the points made by the Board on how best to re-align the SAB process with the HM Treasury process, which was reformed last year. We hope that an opportunity will be found to make the necessary amendments to the 2013 LGPS Regulations ahead of the 2020 scheme valuation process being undertaken. The full response can be found here.
3rd March 2023 Publication of McCloud data issues guidance
SAB has published guidance to assist administering authorities with McCloud data issues. The guidance sets out what options administering authorities in England and Wales may consider if they are unable to collect the data needed to implement the McCloud remedy. It covers both missing data and data that may be inaccurate. The guidance should be read in conjunction with the legal advice provided by Eversheds on McCloud data issues which is referenced within the guidance document. The Scheme Advisory Boards in Scotland and Northern Ireland will decide whether to publish similar guidance. The SAB and LGPC teams would like to thank the working group members who supported the development of this work.
22nd February 2023 Climate Risk Reporting Survey Summary
Last year the Government consulted on new requirements for all LGPS administering authorities to put in place governance and risk management arrangements, as well as setting and reporting against various metrics and targets on climate risk and opportunity. These new functions present new challenges and come at a time when there are many other competing pressures. Consequently, the Scheme Advisory Board commissioned a survey to gauge the preparedness of pension funds for this change. Click to read more
35% of respondents indicated they had conducted a full assessment on what expertise was required for risk analysis. 27% have not and 35% of funds had undertaken some sort of assessment. 69% of respondents indicated they had a plan to source the resources required for the production of the report. While many funds indicated they were awaiting more certainty before carrying out assessments of what was required for the report, some were pressing ahead with plans as soon as possible.
The Board is working closely with the Department and administering authorities to better understand the challenge and support them through it. We intend to repeat this survey after the Government Response to last year’s consultation is published, and the precise requirements are clearer.
Interestingly, the survey also found that 25 funds reported a date of 2050 or sooner for reaching net zero in their asset portfolio, however a substantial number of respondents indicated that risk reporting will not change or will have a limited impact on their asset allocation or choice of investments. Rather they considered it as a means to “show progress” against targets set. Some stated that it provided a focus for engagement both with their asset managers and the underlying companies in order to effect real world change, rather than simply “greening” the portfolio.
20th February 2023 Revaluation Order/Public sector pensions increase
The Pensions Increase and Revaluation Order for public sector pensions has been published today alongside a written ministerial statement which sets out how the main public service schemes will be affected.
15th February 2023 Minister responds to SAB letter on External Audit
Lee Rowley MP, Minister for Local Government, has responded to a letter written to him in August 2022 by SAB on delays in the external audit of local authority accounts, including pension fund accounts. He welcomed the Board’s advice and recommendation to consider the separation of main authority accounts and the pension fund accounts and has asked his officials to consider the scope for developing this further. The full contents of the letter can be found here.
10th February 2023 Consultation on changing the revaluation date issued
DLUHC has issued a consultation on changing the in scheme revaluation date from 1 to 6 April, with effect from 1 April 2023. The proposed change will remove the impact of high inflation on the annual allowance and reduce the number of members incurring a tax charge. The consultation runs for two weeks and closes on 24 February 2023. You can view the consultation on the Scheme consultations page. DLUHC is asking that respondents use the online consultation link to respond. This will allow responses to be analysed more efficiently and quickly.
30th January 2023 DLUHC consultation on changes to the SAB’s cost management process
DLUHC has today launched an 8 week consultation on changes to the Scheme Advisory Board’s cost management process – the process that operates separately from but alongside the quadrennial scheme-level cost management process, which is based upon HM Treasury legislation and directions. The consultation follows the report from the Government Actuary’s Department into changes to the HM Treasury cost management process, and the resulting policy and legislative changes set out in HM Treasury’s response to that report. It acknowledges the differences between these two processes but proposes measures suggested by SAB in its consultation response to better integrate the SAB process within the statutory HMT mechanism. The consultation closes on 24th March 2023 and can be found here.
26th January 2023 SAB Scheme Valuation Report 2022
The Secretariat is currently in the process of planning for the Board’s 2022 Scheme Valuation Report. The report is aggregated using data from individual fund valuation reports. It would be a great help if funds could send their valuation reports to the SAB’s Data Analyst, Gareth Brown ([email protected]) as soon as they have a final version. The individual fund reports will be treated confidentially and only shared on the SAB website once published by the fund. Thank you in advance for your assistance.
9th December 2022 Chancellor announces "Edinburgh Reforms"
On December 9th, the Chancellor of the Exchequer announced a set of reforms to drive growth and competitiveness in the financial services sector. It has been confirmed that the Government will be consulting in early 2023 on issuing new guidance on Local Government Pension Scheme asset pooling. The government will also consult on requiring LGPS funds to ensure they are considering investment opportunities in illiquid assets such as venture and growth capital, as part of a diversified investment strategy. The Chancellor’s full Written Ministerial Statement can be found here.
7th December 2022 Board Chair and Secretary meet with Minister Lee Rowley MP
Cllr Roger Phillips and Board Secretary Jo Donnelly had a useful meeting with the Minister on December 7th, 2022. Topics discussed included pooling, government progress on the Good Governance recommendations, climate risk and reporting regulations for the LGPS and the impact of National Living Wage increases in the coming years on local government.
2nd December 2022 Further education reclassification
Following a review into the classification of further education sector, the Office for National Statistics has reclassified colleges and their subsidiaries in England into the central government sector. You can read more about Further education reclassification on the Government’s website. There is no automatic impact of this change for LGPS administering authorities, but the Board will be discussing the wider implications of this change with the Department for Education.
30th November 2022 2021/22 Annual Reports
The Board is aware that some pension fund audits are likely to be delayed again this year, largely due to issues with auditing the host authority’s accounts. There is a statutory duty under regulation 57 of the LGPS Regulations 2013 for administering authorities to publish an annual report ‘on or before 1 December’. The Board has written to the minister with proposals to help improve the timely completion of audit. In the meantime, the SAB urges administering authorities to publish their 2021/22 annual reports based on the best data available to them by the statutory deadline. Ideally, the report would be based on audited data. But if that is likely to result in a significant delay, the SAB asks funds to produce and publish reports based on unaudited data (labelled as draft), and to re-publish an amended annual report with the external auditor’s opinion and revised data after audit, where necessary.
18th November 2022 SAB finalises its response to DLUHC’s climate risk reporting consultation
SAB has submitted its response to DLUHC’s climate risk reporting consultation, which closes on 24th November 2022. The response includes some over-arching observations on the role of pension funds (as well as their limitations), the production of climate risk reports as well as responses to the Department’s specific questions on governance, scenario analysis, metrics, and risk management. The SAB welcomed the opportunity to engage with the Department’s proposals and believes that pension funds should be able to make a positive contribution by supporting the just transition to a sustainable future. The full response can be found here.
10th November 2022 New Local Government Minister named
It has been confirmed that Lee Rowley MP will be the new minister for Local Government and will therefore take up responsibility for the LGPS. The Board Chair, Cllr Phillips, has written to the minister to welcome him to his new role. Information on Lee Rowley can be found here.
1st November 2022 SAB statement on employer contributions
At its meeting on 10 October 2022 the Local Government Pension Scheme Advisory Board (the “Board”) discussed emerging results from the current round of triennial local fund valuations. Whilst understanding and recognising the extremely challenging position for local government finance, the Board would ask that administering authorities and other fund employers have regard to the desirability for long term stability in pension contributions when considering whether reductions in employer contributions are desirable as a result of an improved funding position. The full statement gives more detail of the Board’s discussion, and full reasons for making this statement.
19th October 2022 SAB Chair writes to Paul Scully MP on the Fair Deal policy
The Board Chair, Cllr Phillips, has written to the Minister to request an update on the Fair Deal policy. The Minister was asked whether the policy was under active consideration and how the Scheme Advisory Board could contribute to the process.
18th October 2022 SAB Chair writes LGPS Scheme Advisory Board meeting invitation to Paul Scully MP
The Board Chair, Cllr Phillips, has written to the Minister to invite him to a future Scheme Advisory Board meeting, saying that Board meetings would enable the Minister to constructively engage on current issues with relevant stakeholders and discuss current developments in the Scheme. The next Board meeting is being held on 5th December 2022 at 1pm.
17th October 2022 Scheme Advisory Board issues response to HM Treasury's exit pay consultation
In August, HM Treasury issued a consultation on a new controls process for high value exit payments paid to staff working in central government. Although that will not affect local government workers directly, some LGPS employers are likely to be covered by the new arrangements and the Scheme Advisory Board has submitted this response.
1st September 2022 DLUHC launches its climate risk reporting consultation
DLUHC has launched its consultation regarding governance and reporting of climate change risks. The consultation seeks views on proposals to require Local Government Pension Scheme (LGPS) administering authorities in England and Wales to assess, manage and report on climate-related risks, in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). The consultation closes at 11:45pm on 24th November 2022.
26th August 2022 SAB Chair writes to Paul Scully MP on age discrimination in LGPS benefits
The Board Chair, Cllr Phillips, has written to the Minister recommending reform of the LGPS rules on death grants and survivor benefits. This is to address recent challenges that the current rules are discriminatory and also to investigate “future proofing” Scheme benefits against potential future legal challenge.
3rd August 2022 SAB Chair writes to Paul Scully MP on Audit issues within the LGPS
The Board Chair, Cllr Phillips, has written to the Minister outlining issues facing funds as a result of audit issues relating to the main local authority accounts. The letter proposes separating pension fund accounts from main local authority accounts as a potential solution to the problem, and asks the minister to task officials to work with the Board and its committees to consider the benefits and risks of such an approach.
3rd August 2022 SAB publishes statement in response to UKLFI's letter to the SAB Chair
The SAB has published a statement in response to UKLFI's letter to the SAB Chair. The full statement is available on the BDS section of the SAB website.
2nd August 2022 McCloud update from DLUHC
DLUHC has provided an update on its work to rectify “McCloud” age discrimination. This has already been shared with LGPS administering authorities in England and Wales and software suppliers. Full details are available in the July LGPC bulletin.
21st July 2022 New ministers for the LGPS
We understand that Paul Scully MP will be the new minister for Local Government and will therefore take up responsibility for the LGPS. We expect that the change of minister, and the process of electing a new Conservative party leader / Prime Minister, may lead to some delays in current workstreams, however we will continue to work with the Department to minimise those as much as possible. The Board Chair, Cllr Phillips, has written to the minister to welcome him to his new role. The Chair previously wrote to the new Secretary of State, Greg Clark MP, seeking an assurance that the consultation on TCFD reporting can proceed as planned for the Autumn, if not sooner. Information on Greg Clark can be found here.
21st July 2022 Academy Trust and Local Government Pension Update
The Department for Education (DfE) has made a written ministerial statement confirming an extension of the guarantee that the closure of an academy trust will not lead to any outstanding LGPS liabilities reverting to the fund. This guarantee was first made in 2013 and now includes a new increased annual ceiling of £20m. The Guarantee provides academy trusts with direct Government backing for certain pension costs. The DfE has asked administering authorities to ensure that this is reflected in this year’s scheme valuation, both in the setting of employer contribution rates and the length of deficit recovery periods. A Parliamentary Minute which sets out the detail of the Guarantee, has been laid in both Houses.
20th July 2022 Net Pay Arrangement Anomaly
HM Treasury has published draft legislation confirming that certain low earning individuals who contribute to pension schemes via a Net Pay Arrangement (NPA) will receive a direct top-up payment from HMRC from 2024-25 onwards, as announced at Autumn Budget 2021. This payment will mean that NPA savers receive the same level of top-up as those who contribute via a relief-at-source arrangement. According to HM Treasury, 1.2 million people are eligible for this pay boost, with 200,000 set to see a £100 increase in their take-home pay. The average beneficiary would receive an extra £53 a year. Further details can be found here
29th June 2022 LGPS 2016 Scheme Valuation Report published by Government Actuary's Department
GAD has published its report on the 2016 scheme valuation which calculates the cost cap cost of the scheme using HM Treasury's valuation directions, as at 31st March 2016. The report concludes that the costs of the scheme were 1.2% below the target cost, meaning no action is required to be taken as there is no breach of the 2% corridor..
12th May 2022 DLUHC publish Special Severance Payment Guidance
The Department for Levelling Up, Housing and Communities has published statutory guidance on the making and disclosure of special severance payments by local authorities in England. The guidance sets out the criteria employers should consider in the circumstances in which it may be appropriate to make a special severance payment. It also the clarifies the disclosure and reporting requirements.
11th May 2022 Queen's Speech Update
Today the government’s legislative programme was laid out and as expected a Procurement Bill was included which will cover the procurement, purchasing and investment decisions of public bodies. The programme also includes a Boycotts, Divestment and Sanctions Bill. The BDS Bill is the same as announced in the 2021 Queen's Speech.
27th April 2022 Board Chair writes to Minister Kemi Badenoch MP in response to the Levelling Up White Paper
Cllr Roger Phillips has written to the Minister to set out the Board's response to the Government's Levelling Up White Paper which was published in February 2022.
19th April 2022 Board Chair and Secretary meet with Minister Kemi Badenoch MP
Cllr Roger Phillips and Board Secretary Jo Donnelly had a useful meeting with the Minister after the Easter weekend. Topics discussed included climate risk and reporting regulations for the LGPS and broader responsible investment themes (including BDS); levelling up; pooling and the impact of National Living Wage increases in the coming years on local government.
17th March 2022 Public Service Pensions and Judicial Offices Bill receives Royal Assent
The Queen has now given Royal Assent to the PSPJO Bill so it becomes the Public Service Pensions and Judicial Offices Act 2022.
11th March 2022 Further note on amendment on investment in the light of foreign and defence policy
The amendment was passed by the Lords on 9th March and will now form part of the PSPJO Bill. A further note containing extracts from Hansard and questions on the effects of the amendment is available on the Boycotts, Divestment and Sanctions page of this site.
9th March 2022 Letter from the Secretary of State for Levelling Up, Housing and Communities to Pension Committee Chairs
The letter sent by the Secretary of State today to the Chairs of Pensions Committees is available on the Boycotts, Divestment and Sanctions page of this site.
4th March 2022 Note on LGPS Investments in Russia
Further to the update on 28th February 2022 below, a related note has been drafted which is available on the Boycotts, Divestment and Sanctions page of this site.
28th February 2022 LGPS Investments in Russia
In the light of events in Ukraine and resultant extant and potential sanctions by the UK government any LGPS funds who are not already doing so are advised to consider the implications for their investment portfolios and discuss with their pools and asset managers what action should prudently be taken.
23rd February 2022 BDS amendment to McCloud Bill
An amendment to the Public Service Pensions and Judicial Offices Bill relating to investment in line with UK foreign and defence policy was passed at the report stage on 22nd February. Further details can be found on the Boycotts, Divestment and Sanctions page of this site
22nd February 2022 McCloud Bill reaches final stages
The report stage and third reading of the Public Service Pensions and Judicial Offices Bill will take place on the afternoon of 22nd February. The final list of amendments will be debated, and if any are passed which relate to the LGPS, in particular NC1, further information will appear on this site
18th February 2022 Further amendments to the McCloud Bill
Further amendments to the Public Service Pensions and Judicial Offices Bill have been laid and will be debated at report stage on 22nd February. Given the importance of the Bill passing by the end of March we would not expect those amendments not laid by the government or directly related to McCloud to have the backing of the government. In particular the amendment laid by Robert Jenrick MP [NC1] covers ground slated for the Boycotts Disinvestment and Sanctions Bill which was included in the Queen’s speech and is expected later in this parliament.
2nd February 2022 DLUHC publishes Levelling Up whitepaper
Today the government published the Levelling Up whitepaper which includes references to LGPS funds having plans for up to 5% of assets to be allocated to projects which support local areas. We understand that in this context local refers to UK rather than local to a particular fund and that there will be no mandation beyond the requirement to have a plan. Further details will emerge over the period up to an expected summer consultation which we understand will also include the outstanding climate risk and reporting regulations and the pooling guidance.
1st February 2022 Change to DLUHC email addresses
From 1st February 2022 DLUHC email addresses will change from @communities.gov.uk to @levellingup.gov.uk There will be a period of transition whilst both domain names will work.
31st January 2022 DWP Consultation on Pensions Dashboards Regulations Launched
DWP have launched a consultation on the draft Pensions Dashboards Regulations. The consultation closes on 13th March 2022.
25th January 2022 Meeting with Mr Michael Lynk
The Chair of and representatives from LAPFF, together with the SAB Secretary held a call with Michael Lynk on 11th January to discuss his letter to funds. The discussion was productive and it was agreed to it follow up with another call in a month or so. It was made clear that LGPS funds’ primary objective in investment is to ensure pensions are paid but they do take human rights issues seriously in their decisions and through LAPFF are actively engaging with many of the companies listed on the database. In that respect Mr Lynk will provide further information on the database in particular the process for removing companies from it. LGPS Funds who are considering responding to Mr Lynk may wish to reference this ongoing discussion.
25th January 2022 - Representation on LGPS pools
Following representations from the Chair of Access Pool, the statement from the Board on fund member representation within LGPS pool governance structure published on the 21st December 2021 has been amended on the Investment Pooling Updates page
21st January 2022 PSPJO Bill amendments for LGPS
Amendments in respect of the LGPS to the Public Service Pensions and Judicial Offices Bill have been laid before parliament in advance of committee stage next week. A summary will be provided on the McCloud page of this site once we have had chance to examine them in detail.
7th January 2022 Police Superintendents’ Association (PSA) Judicial Review Dismissed December 15th 2021
This Judicial Review claim argued that the process around the consultation conducted by HM Treasury in summer 2020 in response to the McCloud/Sargeant cases was legally flawed. The element of the consultation of paramount concern to the PSA was the closure of legacy public service pension schemes on 31st March 2022. The judge found some of the grounds arguable, and that there had been legal errors in the decision-making process following the consultation. However, the judge found that the errors were not material and did not ultimately affect the outcome or content of the consultation response. The judge also stated that “the courts must not do anything directly or indirectly that would delay the passage of a Bill through Parliament, or which would directly or indirectly tell Parliament what the form or content of a Bill should be”. This is a reference to the fact that the Parliamentary process is underway in relation to the Public Service Pensions and Judicial Offices Bill. The full judgment can be found here
At present, the outcome of this Judicial Review has no impact on the Local Government Pension Scheme.
Earlier News articles can be found on the News Archive page