Extending access to the Local Government Pension Scheme (LGPS) to councillors could create a “disproportionate administrative burden”, the Society of Pension Professionals (SPP) has warned.

Responding to the Department for Levelling Up, Housing and Communities’ (DLUHC) consultation on proposals aimed at improving access and fairness across the scheme in England and Wales, the SPP said it supported extending LGPS membership to Mayors but noted “a range of views” among pension professionals on whether councillors should be brought into the scheme, given the “relatively low” financial benefit and the additional complexity that would result.

On academy schools and government efforts to prevent “contribution rate shopping” within multi-academy trusts (MATs), the SPP claimed it was “unreasonable to expect a MAT not to consider the administrative efficiency and lower administrative cost of a consolidation”, particularly as changes in fund allocation “could, for example, potentially double or halve their LGPS pension contributions”.

However, the group noted that if an administering authority suspected unjustified contribution rate shopping, “there remains the backstop of withholding agreement”, which would require the MAT to justify its position to the Secretary of State.

The SPP also raised concerns about the proposed 'New Fair Deal' measures intended to secure continued access to LGPS for outsourced workers.

It warned that the changes could “potentially increase the complexity and administrative burden for administering authorities when a service provider joins the LGPS”, stressing that similar outcomes can already be achieved through widely used “pass-through” arrangements.

It also questioned “the value of imposing further administrative obligations at such a busy time for the LGPS”.

SPP Public Sector Committee chair, Kirsty McLean, said the organisation supported the aims of improving access and fairness but emphasised that “the devil here is really in the detail”.

“Whilst it makes sense to extend LGPS access to Mayors, there are concerns about extending access to local councillors given the low level of benefits involved, the complexity of administering this and the fact it creates inequity between councillors in England and Wales,” she continued.

“We also support the important balance of needing an administering authority agreement to proposed consolidation as a means to curtail unjustified ‘contribution rate shopping’ by academies and have highlighted to policymakers the administrative burdens that the New Fair Deal proposals would create, the results of which could largely be achieved through existing pass-through arrangements.

“More generally, the SPP is aware of the already heavy workload of LGPS administrators and is concerned that these developments (and others recently consulted on) should be introduced in a manageable timeframe given significant capacity constraints in the sector.”

The consultation closes on 22 December 2025.

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