LPFA: Forging working groups with common goals

Thus far, 2015 has without question been a year of huge change within the Local Government Pension Scheme – one that I am sure will be looked back upon as pivotal for local government pensions.

We have witnessed a number of funds across the country embrace collaboration and realise that without working together and pooling our talent and resources it will be difficult – if not impossible – to solve our deficit problem. 

We have also seen chancellor George Osborne elevate the LGPS consultation into the political mainstream earlier in the year, when he announced his focus on infrastructure and the formation of a national commission under Lord Adonis.

However, despite these calls from government and the aspirations of the LGPS it will take time to establish a number of full pooling partnerships.

To really gain the economies of scale, improved returns and wider efficiencies, funds need to bring more asset management in-house, utilise sophisticated liability-management tools and develop improved and lower-cost member and employer services.

Autumn Statement

The Autumn Statement is scheduled for later this month and this may well be used as a platform for the chancellor to announce some more tangible goals for the LGPS and a timetable for change. We look forward to this. 

What is encouraging is that, as many of us are now thinking more collaboratively and working together more closely, our collective voices are being heard.

This was exemplified recently when local government minister Marcus Jones announced that proposals for council pension funds to move much of their assets into passive funds may be scrapped after an outcry from town halls across the UK.

This shows that by uniting we can have a say in our future and influence policy direction. I have been impressed during recent weeks that the LGPS is responding to the chancellor’s calls for collaboration and showing that we can work together in a meaningful way.

Now we need to expand this from deals between a handful of funds, to working groups with a common goal.

Like this year, 2016 will be one of change and one that serves to shape the future of the LGPS.

I look forward to working with other LGPS funds across the country as we seek to establish a structure that will better allow us to provide for our pension-holders’ futures. 

Susan Martin is chief executive of the London Pensions Fund Authority