LGPS ‘Good Governance’ survey reveals widespread support for adopting an ‘outcomes-based’ approach
31 Jul 2019
LGPS Funds should start preparing now for the introduction of an ‘outcomes-based’ approach to improve fund governance standards. The proposal, made by Hymans Robertson, the leading public sector pensions consultancy, and adopted by the LGPS Scheme Advisory Board (SAB) reflects the responses to its industry-wide ‘Good Governance’ survey of LGPS stakeholders.
After an extensive industry consultation which included 140 responses to an online survey and over 150 separate conversations and engagement at related events it became clear that moving to an outcomes based approach would be the most effective solution. This will allow funds to continue doing what currently works well while still ensuring the highest governance standards across the scheme. The report recommends introducing key benchmarks which will be used to assess each fund, these include: evidencing robust conflict management, providing sufficient administration capabilities and resource, having a clear and inclusive policy on employer and scheme member engagement and holding regular, independent governance reviews.
Catherine McFadyen, Head of LGPS Actuarial, Benefits and Governance explains the findings of the survey:
“From the survey’s outset we have been committed to working with as many stakeholders as possible to ensure we arrive at the most practical and beneficial solution for all. We know that the LGPS is full of strong governance examples and this survey has successfully highlighted many of them. By moving to an outcomes based approach rather than imposing a prescribed ‘model’ we will ensure that funds can maintain their individuality while delivering the highest standards of governance.
“It’s crucial that funds take this opportunity to review what they currently do and assess how they would stand up against this approach if it was introduced today. This will allow them to address any areas where improvement or change may be required and ensure they are in the best position moving forward. Funds will need to think carefully about how they plan to evidence the approach they are taking key areas and to show they are willing to learn from the experience of others. This will ensure that every fund in England and Wales is working together to continue to drive governance standards higher.”