OUR ROUND-UP OF THE LATEST PUBLIC SECTOR NEWS AND INSIGHTS
Current Issues in the LGPS - December 2019
09 Dec 2019 - Estimated reading time: 3 minutes
Good Governance update
At its meeting on 6 November, the SAB agreed the proposals put forward by the working groups in the Good Governance Phase II report. The Board has agreed that Scheme stakeholders supported by the Hymans Robertson project team should take forward the ideas contained in the report into Phase III. This will involve the drafting of statutory guidance to set out the expectations for well governed funds. If you have any comments on the Good Governance project please feed them back to the Hymans Robertson project team or to the SAB secretariat directly.
Part 1 Responsible Investment Guidance Consultation
The SAB is consulting on Part 1 of its Responsible Investment Guidance. The stated aim of this guidance is “to assist and help investment decision makers to identify the parameters of operation within scheme regulations, statutory guidance, fiduciary duty…..and the scope for integrating ESG policies as part of investment strategy statements”. The consultation closes on 11 January 2020. SAB is also working on Part 2 of the guidance, which aims to help investors integrate ESG policies into investment strategy. The aim is to have a draft for SAB’s meeting on 3 February 2020.
Hearing and language
Two further Responsible Investment related articles are worthy of noting. These are the Appeal of the Palestinian Solidarity Campaign, which was heard in the Supreme Court on 20 November - we await to hear the outcome and any implications on the LGPS; and the Investment Association’s report on a new "Responsible Investment Framework", which seeks to achieve greater consistency in the language used when discussing and considering Responsible Investment matters.
It’s good to talk
Actuarial valuations can sound and seem to be highly technical exercises, with assumptions and figures flying about all over the place. But the real outcomes, and the real value, emerge when actuaries, officers, committee members and (especially) employers actually get together to discuss what this means for each employer in practice. Investing some time and attention in training, results discussions with officers, employers forums etc. will always reap great dividends. How does your actuary fare in turning theory into practice?
Scottish structure review
The Scottish Scheme Advisory Board (SSAB) met recently to discuss this ongoing topic. It was agreed that its advisers should scope the next phase of work to “evaluate the case for merger”. The SSAB will then consider this and agree what further support may be needed to take the review forward. The Scottish Government is keen for the SPPA to be kept informed of progress, and has asked the SSAB to monitor the impact that pooling has had on the LGPS in England and Wales (this option will be evaluated by SSAB via another workstream).
Sticking plasters being applied to address doctors’ annual allowance tax bills
The NHS across the UK is applying sticking plasters to address workforce issues directly attributable to the effect of the annual allowance and tapering in particular. In Scotland, temporary pension measures have been announced to help retain highly experienced staff. Between 1 December 2019 and 31 March 2020, an interim Scottish Government policy will give eligible NHS staff the option to have their employer pension contributions paid to them as part of their basic salary, providing an alternative option to restricting their hours in order to mitigate pension tax. And south of the Border in England controversial plans would see the NHS covering doctors’ 2019/20 pension tax bills amid warnings from the sector that workforce shortages are putting patient safety at risk. We know the annual allowance is also impacting senior managers in local government and wonder how long it will be until wider, long-term reforms to the tax regime are forthcoming.
First came National Confidence – now comes the National Knowledge Assessment!
Following the success of last year’s National Confidence assessment of Pension Committees and Pension Boards, we’re delighted to announce a LGPS National Knowledge Assessment in 2020. Funds will be able to fully answer and importantly evidence how knowledgeable their Pension Committee and Pension Boards are, with participating funds also able to benchmark this knowledge level against other LGPS funds. Each set of results will not only come with analysis and suggested next steps for funds but also a results based training plan. Look out for more news on this National Assessment and when this will be available to your fund!