The government has confirmed that it will introduce a March 2025 deadline for the accelerated consolidation of Local Government Pension Scheme (LGPS) (England and Wales) assets, as well as new private equity investment requirements.

The government previously launched a consultation on new targets for LGPS funds to double their existing investments in private equity to 10 per cent, in a move that is expected to help unlock £25bn by 2030.

As part of the changes confirmed today (22 November), the government will share revised investment strategy statement guidance confirming that funds should transfer all assets to their pool by 31 March 2025, and set out in their ISS assets which are pooled, under pool management and not pooled and the rationale, value for money and date for review if not pooled.

It will also revise pooling guidance to set out a preferred model of pooling including delegation of manager selection and strategy implementation.

In addition to this, it will implement a requirement in guidance for administering authorities to set a training policy for pensions committee members and to report against the policy.

The government also intends to amend regulations to require funds to set a plan to invest up to 5 per cent of assets in levelling up the UK, and to report annually on progress against the plan.

This is alongside revised ISS guidance to require funds to consider investments to meet the government’s ambition of a 10 per cent allocation to private equity.

However, industry experts previously raised concerns around the impact of the proposals, with some branding the consultation on the changes a ‘Frankenstein’s Monster’.


The government's response acknowledged that there were some industry concerns, notably on the transition deadline of March 2025, aspects of the preferred model of pooling, and the 10 per cent ambition for private equity allocation.

However, the government argued that setting clear and up to date expectations in guidance on these matters is essential to securing a step change in progress on pooling and associated benefits of scale, and does not cut across the fiduciary duties of funds.

The government also confirmed that the new guidance will not mandate investment in any particular assets, instead expressing a strong preference for progress on a voluntary basis, embracing the benefits of scale and striving to deliver returns.

In addition to this, the government argued that the LGPS is in a favourable position to make a greater contribution to UK growth, encouraging funds to consider what this should mean for their risk appetite and investment strategy, and to review the investment opportunities, particularly in private markets.

---