Current Issues in the LGPS - July 2017
30 Jun 2017 - Estimated reading time: 5 minutes
Following a Judicial Review, the High Court has ruled that the section on boycotting foreign nations and the UK defence industry in the DCLG’s guidance on preparing and maintaining an investment strategy statement was unlawful (highlighting a flaw that the Secretary of State has focused on a single non-financial factor). The impact of this finding on funds has yet to be determined, but it highlights that careful thought (and evidence) is required over any decision to exclude investments based on non-financial factors.
Taking the initiative
The Transition Pathway Initiative has set up a (free to use) toolkit that allows investors in the Electricity Utilities and Oil and Gas sectors to evaluate the quality of companies’ management in dealing with the transition to a low carbon economy. The toolkit will help funds determine the extent to which they are exposed to more carbon sensitive stocks and challenge their managers accordingly.
Too much pressure?
The “Transitional Pressures in the LGPS” conference on 6 June held a Q&A with the 4 firms of actuaries. A broad range of topics was covered including the 2016 valuation results and challenges (data quality, the number of employers and upwards pressure on the future cost), variation of results by employer and the impact of section 13 valuations on behaviours. On the actuarial wish list were to allow more flexibility to deal with different employers and for the incoming Minister to leave the LGPS alone.
Keeping your data safe
The EU’s General Data Protection Regulation (GDPR) will come into force on 25 May 2018 and the recent Queen’s Speech makes data protection reform a key part of the government’s legislative programme. It places more rigorous requirements on funds, and higher fines for serious breaches – our 60SS provides more detail. We already have a range of measures in place to protect your data, and will comply with GDPR well ahead of May 2018. Part of that compliance is to review contractual wording, and we are working with all of the LGPS frameworks on this. Any non-framework contracts will also be reviewed. You might find this twelve-step checklist handy when making your own preparations.
Webinar on LGPS costs, accounting and college mergers
Are your participating employers worried about their LGPS pension costs? Or curious about your upcoming FRS102 accounting reports? Or about to navigate a college merger? If the answer is yes to any of these then please alert them to a replay of our recent webinar on how best to navigate these challenges.
“A level” understanding of academies
Whenever the topic of academies in the English LGPS crops up, you could be forgiven for feeling like it’s re-sitting an exam you’ve studied long and hard for. But collectively the understanding of this subject is moving from basic studies into “A level” territory, with most people appreciating that a “win-win” solution can be found. It’s heartening that the Scheme Advisory Board thinks this can be achieved within existing LGPS structures.
Upcoming Hymans events
We'd be delighted if you and your colleagues can join us for lunch from 12.15pm on Wednesday 12 July, on the first day of this year's CIPFA conference. The lunch will be taking place at the Radisson Blu Edwardian Hotel (across the road from the conference) where you’ll have the opportunity to network with your peers in relaxed surroundings during the first break of the conference. We hope to see you there, please click here to register.