The Ministry of Housing, Communities and Local Government (MHCLG) has published guidance on new Local Government Pension Scheme (LGPS) regulations relating to asset pooling, investment strategy statements, and fund governance, as set out in the Pension Schemes Act 2026.

Its asset pooling guidance aims to help administering authorities and asset pools in the LGPS to comply with the requirements set out in the LGPS (Pooling, Management and Investment of Funds) Regulations 2026.

The regulations form part of the Pension Schemes Act 2026 and require administering authorities to participate in a pool, while pooling companies will need to be authorised as full-scope UK alternative investment fund managers from 30 September 2027.

The MHCLG’s guidance covers pool resourcing and costs, asset management, local investment, reporting, governance, and government powers to direct asset pool participation.

Its pooling guidance is expected to be read in conjunction with the government’s guidance on preparing and maintaining an investment strategy statement (ISS), which was published alongside it.

The investment strategy statement guidance replaces previous guidance, published in 2017, and relates to administering authorities’ ISS's, outlining objectives, priorities, and preferences in relation to the investment of funds and other assets.

The guidance sets out the roles of the administering authority and asset pool, and provides guidance on how administering authorities should set high-level investment objectives in their ISS.

Also included was guidance on reporting strategic asset allocation, responsible investment, local investment, reviewing ISS’s, and government powers to direct administering authorities to make changes to their investment strategies.

The third piece of guidance related to fund governance, and covers knowledge and understanding, LGPS senior officers, ‘independent persons’, and independent governance reviews.

Commenting on the asset pooling guidance, Hymans Robertson head of LGPS investment, Iain Campbell, said: “As was already known, the guidance confirms and provides further detail on the significant number of investment decisions being passed from funds to pools.

“It is pleasing to see the guidance acknowledge the need for funds to be able to challenge and oversee their pools.

“That said, it is strange to see government trying to limit this in places, given the vast influence pools will have on their investment outcomes.

“Funds will need a strong grasp on whether their pools are st up for, and delivering, success, to fulfil their fiduciary duties.”

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