The pensions minister has tabled a series of amendments to the Pension Schemes Bill aimed at bringing Scottish Local Government Pension Scheme (LGPS) funds into the scope of the bill.
Torsten Bell has proposed changes to the draft legislation removing specific references to the LGPS in England and Wales, and changing references to the secretary of state to “responsible authority”.
These are explicitly aimed at ensuring the first clause of the bill – which relates to pooling arrangements – covers the LGPS in England, Wales and Scotland. Northern Ireland’s £10.4bn LGPS fund, NILGOSC, is overseen by the devolved government in Stormont.
Scotland’s LGPS funds are overseen by the country’s ministers and operate separately from those in England and Wales. As such, they are not currently subject to the investment pooling regulations.
However, the 11 Scottish funds share services between them, including an investment management arrangement that sees Lothian Pension Fund’s regulated asset management subsidiary run fixed income and equity portfolios for the Falkirk and Fife funds.
In an interview with Pensions Expert’s sister title LAPF Investments published in January, Lothian’s chief investment officer Emmanuel Bocquet explained that the pension fund also had an information-sharing arrangement in relation to infrastructure deals with other Scottish funds and NILGOSC.
He added: “If pooling stops at Hadrian’s Wall, that’s fine – we’ll carry on doing what we do. If there’s some kind of mandation, we’re happy to help.”
Bell has also put forward an addition to the bill designed to avoid efforts from the government to direct an LGPS fund to join or leave a specific pool from “being frustrated” by the pool or affected funds.
However, another addition to the pooling section of the bill, also proposed by Bell, introduces a requirement for the government to consult the affected funds and pools before it directs anyone to join or leave a pool.
Elsewhere, a separate new clause for the Pension Schemes Bill has been proposed that would make agreements between LGPS funds and pools exempt from public procurement requirements.
The committee scrutinising the bill is meeting for the first time today (2 September) to hear oral evidence from industry representatives. Seven other meetings have been scheduled between 4 September and 23 October.
