The Local Government Pension Scheme’s (LGPS) Scheme Advisory Board has penned a letter to pensions minister Torsten Bell requesting more time to implement the government’s requested changes to asset pooling.
The board’s chair, Roger Phillips, said in the letter that the LGPS would be “doing a disservice to our seven million members” if it did not make an “urgent request” for an extension to the March 2026 deadline.
“The [LGPS’s] shared and unanimous experience, from having built the existing eight pools, is that the changes asked for cannot be delivered with the care needed within the proposed timescale.”
LGPS Scheme Advisory Board
The deadline applies to changes announced in November as part of chancellor Rachel Reeves’ “megafunds” plan to accelerate pooling. The government called for all pools to be regulated by the Financial Conduct Authority, and for pools to be able to offer investment strategy and asset allocation advice to partner funds.
The government also wants all remaining assets to be pooled by the end of March 2026, with legacy assets overseen by the pool until they can be wound down. It has also called on individual LGPS funds to consider merging.
In the letter, dated 12 May and co-signed by Phillips and the board’s vice-chair Jon Richards, the board outlined concerns that multiple other changes to legislation had contributed to a “perfect storm of significant pressures” on the LGPS.
These included ongoing work on the McCloud remedy, connecting the LGPS to the pensions dashboards system, and complying with the Pensions Regulator’s new code of practice.
In addition, Phillips and Richards highlighted that recent local election results will change the composition of oversight committees in some administering authorities, causing delays to some decisions while new committee members get up to speed.
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“We believe that more time will be needed to realistically implement the government’s proposals and not put the scheme at risk,” the pair wrote.
“The pace of change requested is partly due [to] the understandable desire to minimise transition risk and move as quickly as possible to the new arrangements. However, the sector’s shared and unanimous experience, from having built the existing eight pools, is that the changes asked for cannot be delivered with the care needed within the proposed timescale…
“We would welcome the opportunity to meet with you to start a dialogue about some of the constraints and difficulties that are being experienced on the ground now, and try to reach agreement on an alternative, mutually acceptable, plan for the future,” the letter stated.
The letter did not mention the proposed closure of the ACCESS and Brunel pools.
