The ongoing work to consolidate the Local Government Pension Scheme (LGPS) remains on track, industry experts have suggested, although there are growing concerns over the sustainability of workloads and the longer-term direction of travel.

Speaking at the Pensions UK Annual Conference, Pensions Minister, Torsten Bell praised the “important and impressive” work being undertaken across funds and pools, emphasising that the sector had already delivered change that many had once thought impossible.

“People are getting the job done because they know that this is important in the long run,” he said.

Bell also clarified that while consolidation efforts were progressing well, there were no current plans to impose further pooling or mergers from central government.

“We don’t have plans to force further consolidation,” he said. “The LGPS is already a very very large part of the UK pensions landscape, we are talking about a very signifcant pension player."

But the delivery of this work has not been without strain, as was highlighted in a later session, as West Sussex County Council head of pensions, Rachel Wood, and South Yorkshire Pension Funds Authority director, George Graham, both highlighted the intense operational pressures being faced by LGPS professionals.

When asked what the biggest challenge facing the LGPS was, Wood admitted that it was the "volume of work and time pressures", although she stressed that "we're approaching it with a good sense of humour and commitment to the role".

Graham agreed, warning that while pooling had dominated attention in recent years, “the stuff that really worries” him sits elsewhere.

“It’s the administration side – it's the cloud, it's access and fairness, and the latest consultations – all of that is creating more and more work for admin teams, creating a scheme that's more and more complex.

"That is putting a lot of pressure on people who are already dealing with an ever-increasing volume of incoming work," he continued.

And systems need to be updated to allow this volume of work to be done, as Graham acknowledged that "he systems we use are not necessarily the best in the world", emphasising the need for the LGPS to get better at commissioning software and taking control of the software agenda.

That call for technological reform was underlined by others on the panel, as LGPS Central CEO, Richard Law-Deeks, noted that administration “is the coalface of the LGPS,” critical to member outcomes yet often under-recognised.

“It’s unbelievable how the LGPS community has pulled together to deliver change,” he said. “That sense of collaboration and shared purpose is something we need to hold on to as the scheme strengthens its resilience and credibility.”

And this seems likely to continue, as whilst the Minister ruled out further forced consolidation for the LGPS, Law-Deeks suggested that future differentiation among pools may come not from formal specialisation, but from joint working on complex or large-scale investments.

“I think collaboration will really kick in around infrastructure and major deals,” he said. “That’s where the LGPS can have a bigger seat at the table globally.”

Graham agreed that while pools have distinct cultures, there is growing acceptance that they must share expertise.

“We’ve got to think carefully about this,” he said. “If one pool has already developed real capability, we should use that expertise on behalf of the whole scheme. That means compromising a bit more than we've been prepared to do up to now".

But the panel were divided on how far the consolidation process will ultimately go for the LGPS, with Wood stating that she "wouldn’t like to guess".

Law Deeks envisaged a “more voluntary, event-driven” process leading to fewer, larger funds and pools. “There will be fewer pools, fewer funds, and probably more scale,” he said. “But I hope it happens voluntarily, driven by purpose rather than compulsion.”

Graham agreed, anticipating an evolutionary process rather than a sudden shift.

“If I had to guess, we might end up with slightly less than half the current number of funds by 2030,” he said.

“But that depends on some big political decisions, particularly around smaller funds. Larger funds tend to show stronger governance, but we shouldn’t lose sight of the importance of local service and accountability.”

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