LGPS leaves regulator out in the cold

Among the Hutton proposals is bringing local authority schemes in line with private sector defined benefit arrangements with trustee boards, which would bring them under the regulator’s remit.

But a private working group of local authority pension fund councillors established by the Local Government Association (LGA) has come up with a range of alternative regulatory structures instead.

Some of its members have called for the Department for Communities and Local Government to (CLG) to expand to become its regulating body for 2014. Others want the LGA to step up and adopt a stronger role as a regulator.

And Mike Taylor, chief executive at the London Pension Fund Authority, said hiring an independent chairman would be the best solution.

“The regulator has no locus over local councils – we’d need changes in the law to allow it,” he pointed out.

At the National Association of Pension Funds conference last week, a councillor from the Norfolk Pension Scheme, who sat in the working group, suggested the CLG should hire extra staff to give it the capability to do more in the way of LGPS regulation.

He said: “We don’t want the Pensions Regulator because no one there is really that interested in LGPS.”

A representative from the Enfield Pension Scheme argued an LGPS central body would be a much better system than the central government controls that are currently in place.

But Terry Crossley, who retired last week from his role as deputy director of workforce, pay and pensions at the CLG, attempted to reassure the councillors the regulator could do the job.

“Fear not”, he said. “The regulator has the resources to do this properly.”