Local Government Pension Scheme: PLSA launches resources to help employers

The Pensions and Lifetime Savings Association said the guide was for employers participating in the Local Government Pension Scheme (LGPS).

It has also published an additional resource to help LGPS professionals and external stakeholders understand the sector’s regulatory complexity; both releases coincide with the PLSA’s annual Local Authority Conference in Gloucestershire.

LGPS employers best practice

The PLSA public sector reforms that led to the outsourcing of local authority services, as well as LGPS employers’ understanding of how the scheme operates and of their responsibilities within it, have become "somewhat disjointed in recent years".

The guide addresses recommendations in the PLSA’s 2022 report The LGPS: Today’s Challenges, Tomorrow’s Opportunities which urged funds to be proactive in providing information and assistance to existing and prospective employers, as well as to communicate the benefits of staying within the LGPS.

It includes chapters dedicated to how to engage with administering authorities, managing data, information about actuarial valuations, risk management, internal dispute resolution procedures (IDRPs) and automatic enrolment.

Challenges of navigating the LGPS landscape

The LGPS is the largest funded defined benefit (DB) or final salary pension scheme in the UK, and one of the biggest in the world, with 7.1 million members, over 15,500 employers, and assets worth over £425bn.

No one regulator has responsibility for its entirety, something many LGPS have said causes confusion; in a recent PLSA survey of LGPS professionals, two-thirds said they believe the main legislative or regulatory requirements that govern their work are overlapping between different organisations and or a regulator, with a similar number saying this caused them confusion.

The PLSA has also publishing a ‘regulatory map’ to help external stakeholders understand and navigate the complexities in which the LGPS operates.

Tiffany Tsang, head of DB, investment and the LGPS at the PLSA said:“For more than a decade, the LGPS has undergone continuous, rapid change. Against a backdrop of the economic uncertainty, austerity and pay freezes for local authorities – and, more recently, the global pandemic – it has had to contend with a rolling series of reforms that add to its administrative burden.

“The LGPS is well funded and one of the largest pension provisions of its type in the world. The guide we are publishing today will help LGPS employers establish best practice and to better understand the value their employees get from being a member.

“The regulatory map is designed to help external stakeholders understand the complexity of the overlapping bodies that have influence in the LGPS universe, and hopefully start a conversation on how entities could work together in a more joined up way.”