Responding to the speech at the NAPF Local Authority conference by Brandon Lewis, Minister for Local Government, Steve Simkins, KPMG’s head of public sector pensions, says:
“The Minister’s announcement that the structure of the LGPS is to be consulted upon is very welcome. His speech suggests that it is being considered in the broadest context with all the levers being brought into play.
Without pre-determined solutions the consultation could and should be wide ranging and we look forward to contributing to this process. The key will be to move the levers at the same time to get to the best solution as investments, funding, number of funds, administration and governance are inter-related.
The LGPS is maturing and this is one of the triggers for the review. Indeed, the Minister tackles head on the important issue of fund deficits. But whilst deficits in maturing pension schemes present specific challenges assets can in principle be deployed to meet benefit obligations out of both income and capital as long as this is carried out in a structured way.
In the meantime the LGPS has an actuarial valuation to deal with which will require decisions about new contributions to be made by 1 April 2014. Whilst this review might help in the future, these immediate challenges remain.”
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