From the 1 April 2015 each LGPS will have to by law set up a local Pension Board. The statutory role of the Boards is to advise and assist the fund to make decisions on all matters. We are still waiting for the final government regulations to be signed off by the Minister and laid before Parliament.
While I think that the Government has messed up over reform of the LGPS. Pension Boards will be good for the funds providing they are allowed to do their job properly and genuinely involve beneficiaries in the running of their funds.
Unless we improve performance and cut costs, due to the 13% employer contribution cap on future accrual (new pensionable service) the whole future of the LGPS will be put in peril.
UNISON has put together a model constitution for the Pension Boards (see below) which has been sent to all LGPS funds. This has already been adopted by all the Scottish LGPS funds.
I would recommend that every LGPS sets up a working group with UNISON and the other local government unions on how to make their local pension board work.
UNISON Model LGPS Pension Board Model Constitution
- Reports produced for the pensions committee
- Seek reports from the scheme managers on any aspect of the fund
- Monitor investments and the investment principles/strategy/guidance
- Monitor fund investment and custodian transaction costs
- The fund annual report
- External voting and engagement provisions
- Fund administrative performance
- Actuarial reports and valuations
- Funding policy
- That there is evidence or information which it is considered needs re-evaluating or new evidence or data which the Pensions Committee did not access or was not aware of at the point of decision making and which is considered material to the decision taken;
- That the decision of the Pensions Committee could be considered illegal or contrary to regulations;
- That the decision of the Pensions Committee is contrary to a relevant Code of Practice published by the Pensions Regulator; or
- That the decision is not in the interest of the continued financial viability of the Scheme or is against the principles of proper and responsible administration of the Scheme