07 May 2025
5 min
The US 'Liberation Day', pooling developments, 2025 valuations and local investing are just some of the things occupying LGPS minds at the moment.
April was another key staging point in the evaluation of the LGPS pooling landscape in England and Wales. The Government issued formal letters in response to each pool's proposals about how it would meet the new requirements set out in the “Fit for the future” consultation. While the Government’s response to the consultation has yet to be seen, the letters set out its views on the pooling plans and triggers action for pools and partner funds to either progress plans or revisit options. This may result in a significant shake up of the pooling landscape as we know it; whatever pool your fund is in, a lot of hard work lies ahead. Following the release of the letters, the Chair of the Scheme Advisory Board met with HMT and MHCLG officials to discuss the Government’s decisions, and then issued a statement.
The importance of data
Good data quality is key to a successful valuation and LGPS funds have been working hard to cleanse data in time for data submission next month. Equally, our dedicated valuations team have been making upgrades to systems and processes to make data submission as smooth as possible at 2025. Please look out for more information this month to guide you through the process, with communications about data requirements, data help guides and videos.
Contribution trends and market volatility
LGPS funds aim to have a longer-term strategy that cuts through shorter term ‘noise’. With this in mind, for many of the funds we advise, provisional contribution rates for local authorities have already been set. Our 60-second summary covers these early contribution trends, noting that most funds are striking a balance between providing contribution relief to employers now, while keeping a careful watch on longer-term stability. This ability for long-term funding plans to withstand short-term volatility has been immediately put to the test, with US trade tariffs causing significant market disruption throughout April. Two of our actuaries, Tom Hoare and Rob Bilton, were joined by our capital markets expert, Chris Arcari, on a webinar to discuss the impact on LGPS funds and 2025 valuations. The recording is available on demand here.
There's expected to be an announcement from the Government that it has agreed further voluntary minimum allocation targets with large pension funds to boost private market investment, particularly focusing on the UK. This initiative, dubbed the “Mansion House Compact II”, is part of broader financial reforms expected to be announced by the Chancellor during her Mansion House address on 15 July. Reports (such as in the Financial Times) suggest that the Government might consider enforcing more UK investment if the desired progress is not achieved. Mandating investment would be a significant step, and there was similar speculation ahead of the Chancellor’s November Mansion House speech. Our policy briefing note at that time explored how funds might increase UK allocation rapidly.
Download the full publication below.
If you have any questions or would like to discuss anything further, please get in touch.
We pride ourselves on being thought leaders and are constantly discussing the many issues facing and shaping our industry. Sign up to find our current thinking on topical issues.
Opens in new window Subscribe
