“The report by the Centre for Policy Studies was a welcome development in terms of challenging the structure of the LGPS for the good of its stakeholders, including local taxpayers.
“It is entirely right that scale and consistency are key themes, but the conclusions reached – for example around geographically constructed schemes – do not take account of the complexity of each, due to the diversity of employers within the LGPS. The proposal to use central assumptions to determine liabilities could lead to local authorities paying too much and private sector contractors too little.
“The reform debate stands to benefit from the inclusion of more innovative and far reaching structural change. I’d like to see reference to horizontal, rather than vertical integration, as a route for building scale in a way that recognises the spectrum of characteristics of the employers. ‘Regrouping’ by sector would allow not only contribution requirements to be more accurately matched to risk profiles but also for the necessary expertise to be better focused, improving governance and efficiency.
“Given the government’s appetite for leveraging pension fund assets to support economic growth, it would also be a valuable step forward to debate asset backed funding in the context of the LGPS. This offers the prospect of a better funded LGPS without requiring additional cash outlay from local authorities.”
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