Latest News on the Good Governance Project
At the September 2022 Compliance and Reporting Committee meeting, the Department confirmed that ministers had considered the action plan and agreed to take forward the proposals. And that the Department would in due course consult on how to take these forward, including some suggestions of its own.
At the December 2022 Board meeting, it was further clarified that the Department’s plans included the streamlining of the annual report document, with funds reporting their performance against their various strategies rather than re-iterating where those strategies can be found.
The Department also signalled its preference to mandate training plans for training pension committee members so that they could demonstrate the necessary knowledge and understanding to fulfil their functions. The Department also expressed its preference to develop a standard set of administrative KPIs that should be used by all funds. This went further than the recommendation contained in the Good Governance review, but if done effectively might allow for comparisons of relative performance between funds.
Timescales for this work have not been confirmed, but the Department maintain that strengthening governance is a priority and it was a major theme of the Minister’s address to the LGA’s LGPS Governance Conference in Cardiff in January 2023. Taking forward these recommendations will continue to be a key focus of work for both the Department and the Board going forwards.
The Compliance and Reporting Committee, has set up a number of working groups to do some detailed work fleshing out these proposals. The workplan, for these groups shows how they are taking forward the proposed changes to the Annual Report as well as looking at improvements to governance, compliance and administration. The group has been facilitated by the Board Secretariat and had input from a range of practitioners, advisers and officials from the Department.
The Minister has asked his officials to continue working with the Board, but we now expect there to be only minor changes to the LGPS Regulations and the rest of the proposals to be implemented using statutory guidance. We do still expect the consultation to propose making the administration strategy mandatory, though, as well as requiring a new governance strategy that will go beyond the current requirement to publish a governance compliance statement.
The Department has welcomed the Board’s work, and that of the working groups, and said that it will continue to work closely with them to draft its final proposals. Even without further action from the Department, the Board will in the coming year consider what more can be done independently to improve governance across the scheme.
Background to Phases I to III
The Good Governance project was instigated by the Board to examine the effectiveness of LGPS governance models and consider enhancements to further strengthen governance. After a procurement exercise, Hymans Robertson were appointed by the Board in January 2019 to work alongside scheme stakeholders to identify best practice and propose beneficial changes to regulations or guidance.
In the February 2021 Scheme Advisory Board Meeting, the Board considered the final report from Hymans Robertson and agreed to write a letter to the Minister, then Luke Hall MP, with an action plan to implement its recommendations.
The Phase I to III Timeline page (see menu on the right of this page) shows how the project developed from April 2019 to the publication of the Phase III report in February 2021.