Latest Public Sector News

22.02.16

Government ‘may have gone too far’ in pension regulation changes

Proposed pensions regulations in the public sector have been broadly welcomed by the body responsible for public sector pensions’ schemes, but the Pensions and Lifetime Savings Association (PLSA) has expressed concern that the government is going too far in terms of deregulation.

In a letter to the DCLG, written as the consultation on proposals to revoke and replace the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2009 with new regulations closed on Friday, Helen Forrest Hall, defined benefit policy lead at PLSA, said the association welcomes the new regulations, but is concerned that they include no actual reference to the fiduciary duty of investments to pay members benefits.

She also says that the regulations could give too much power to the government to direct how funds invest without regard for the cost to employers and members, and that the six month timescale the regulations allow for funds to publish an Investment Strategy Statement could be challenging.

The letter also says that the new guidance that funds’ policies on environmental, social and government factors should reflect UK government foreign policy, which critics say could limit the power of pensions’ funds to divest from investment areas viewed as unethical, seems “unhelpful, unnecessary… and undemocratic”.

Joanne Segars, CEO of the PLSA, said: “The Pensions and Lifetime Savings Association has argued for almost a decade that arbitrary limits on the amount LGPS funds can invest in certain types of legal structure are prescriptive, out-of-date, and do not best meet the needs of funds or beneficiaries.

“So we fully welcome the removal of these limitations and the move towards the prudent person approach. But there is a danger that government may have gone too far in a number of areas.”

In a statement submitted to the consultation, Sir Merrick Cockell, chair of the London Pensions Authority (LPFA), said that the LPFA welcomed another key part of the proposals – increased pooling of funds between pensions authorities.

He said LPFA pooling with the Lancashire County Pension Fund (LCPF) was expected to save around £30m in the next five years and lead to enhanced outcomes of around £20-£30m.

Last year the Centre for Policy Studies called the LGPS “a national embarrassment” in a report saying it was poorly governed and at risk of running out of money.

The proposed changes may be viewed here, and the full PLSA letter here.

Comments

There are no comments. Why not be the first?

Add your comment

 

public sector executive tv

more videos >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the open more > more last word articles >

public sector focus

View all News

comment

Support for councils following Grenfell

04/09/2017Support for councils following Grenfell

Ian Moore, CEO of the Fire Industry Association (FIA), discusses the wider ... more >
A quiet revolution

04/09/2017A quiet revolution

Dermot Ryan, programme director at NHS Digital for the Health and Social Ca... more >

interviews

‘The HSCN is the realisation of industry best practice’

30/06/2017‘The HSCN is the realisation of industry best practice’

Keith Smith, public sector business development manager at Virgin Media Bus... more >

the raven's daily blog

How do we deliver true social and economic value for the community?

18/09/2017How do we deliver true social and economic value for the community?

Five years on from the introduction of the Social Value Act, Alison Ramsey, frameworks co-ordinator at Scape Procure, reflects on the key questions that prompted the legislati... more >
read more blog posts from 'the raven' >

editor's comment

14/08/2017Time for reflection

A lot has happened since the last edition of PSE was published. In particular, the snap general election delivered an astounding result that many of the pollsters and political experts could not have predicted when Theresa May initially called for it back in April. Chris Painter, Professor Emeritus at Birmingham City University, provides a fascinating analysis of the campaign, and assesses the aftermath of the election on pages 26-28. It is a must-read article.  During the... read more >