Local Government Pension Scheme (LGPS) knowledge in non-traditional areas has improved in recent years, although understanding of 'traditional' topics, such as investment, has fallen, according to the LGPS National Knowledge Assessment 2022.

The annual report from Hymans Robertson revealed an increased level of knowledge in the less traditional areas of administration, governance and actuarial methods, standards and practice, when compared with the 2020 assessment.

Despite this, the level of understanding of topics that have traditionally been the focus of committees, including investment and financial markets, has fallen during the same period.

However, the survey showed that even where a committee or board has a low average score, there are still individuals who have sufficient knowledge levels in each area, which Hymans Robertson raised as evidence that collective knowledge at LGPS funds is good.

Indeed, the results also showed that LGPS chairperson knowledge levels remain particularly high, with an average score of 68 per cent, in comparison with the average participant score of 53 per cent.

Engagement with the survey also improved, as an "encouraging" 73 per cent of eligible participants completed the assessment, up from 61 per cent in the 2020 assessment.

Hymans Robertson senior LGPS governance, administration and projects consultant, Andrew McKerns, highlighted this "marked increase" in engagement as indication of the appetite for understanding current knowledge levels at LGPS funds, as well as a "continued commitment to learning".

"Engagement is a key component for informed decision making," he added. "Maintaining knowledge from all members is also a vital aspect of funds governance requirements."

McKern also highlighted the high levels of knowledge demonstrated, particularly at chair level, as "really encouraging", clarifying however, that there is still room to increase this further through continued training, particularly in light of the recent period of "significant change".

“The past two years have brought many new members to pension committees, and it’s important that they fully understand their role and are engaged with the responsibility they have to scrutinise LGPS requirements," he stated.

"This year’s assessment was undertaken against a backdrop of The Pensions Regulator’s (TPR) upcoming single Code of Practice, the England and Wales Scheme Advisory Board’s Good Governance recommendations, and increased expectations as the LGPS landscape continues to transform at pace.

"The broadening of the topics that pension committee and board members have had to address inevitably leads to increased pressure on funds.”

Also commenting in the report, TPR policy delivery lead, Nick Gannon, stressed the need for the LGPS to mitigate against the loss of key individuals, noting that while the turnover of those with governance responsibilities can be a “significant issue for any pension scheme”, this is especially true of the LGPS.

He explained: “Electoral cycles and changing committee membership can lead to the unexpected departure of key members of the governing body. Good succession planning and clearly recorded processes help mitigate this risk.

"Scheme managers should be aware of the risks from turnover and plan accordingly. A key part of this is ensuring that training needs are assessed, and that training is delivered and then clearly recorded.

“This is especially true at appointment, and perhaps before appointment, for new board and committee members so that they are swiftly able to fully contribute to the governance of the scheme.

"It is also an important feature of being able to identify the risk of, and then mitigate, the loss of key individuals. Pension scheme governance is challenging and requires more than just a knowledge of pensions."

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