Warwickshire Pension Fund - Member briefing – November 2024
You may have seen in the news that the government has communicated that it intends to implement changes in how the Local Government Pension Scheme (LGPS) manages its investments.
You can read the proposals here:
Local Government Pension Scheme Fit for the Future Consultation - GOV.UK
The main purpose of this communication is to reassure you that the potential changes will not affect the pension benefits that are due to you and there is no action that you need to take in response to the government's proposals. Your LGPS pension is a defined benefit pension, and nothing in this consultation’s proposals will change what is due to you. The consultation is about how we manage investments, and the governance of the Fund.
The other purpose of this communication is to summarise for your information the main themes of what is proposed, and what your pension fund is doing in response.
The proposals cover three broad themes:
1. Pooling – Since 2018 the LGPS has been implementing large investment management pools in order to benefit from being able to invest on a larger scale. The Warwickshire Pension Fund is a part of a pool called The Border to Coast Pension Partnership. The Warwickshire Fund manages a large sum of money (currently £3 billion) but the pool is much larger, managing over £63bn assets on behalf of its member funds. The government wants to see pooling fully implemented and implemented to a certain set of standards. Our pool already meets most of the government’s expectations well and has plans to go further that align well with the government’s proposals. We are working closely with our pool and our partner LGPS Funds in the pool to make the most of the opportunities that pooling has to offer.
2. Investing in the UK - the government wants to see more investment in the UK and to promote the UK economy and to this end would like LGPS Funds to invest more in the UK. We already consider ways to invest more in the UK and locally, and always consider this when it aligns with our primary purpose to pay your pensions now and in the future.
3. Improving governance – the government wants to ensure consistency in the achievement of good governance standards across all LGPS Funds. We broadly welcome these proposals, and already meet most of them, and will continue to look for and implement improvements to how we govern and manage our fund.
We will be responding to the consultation by the 16 January deadline. Our response will be a publicly available document. This will be discussed by our Pension Fund Investment Sub-Committee on 9 December and at a special meeting in early January when a formal response will be signed off. Papers will be published here.
If you wish to ask any questions or provide any comments on the consultation, please contact pensions@warwickshire.gov.uk.
