The ‘rapid’ change and reform seen in the Local Government Pension Scheme (LGPS) space over the past decade is expected to continue by those who work in the sector, a survey by the Pensions and Lifetime Savings Association (PLSA) has found.

The survey, aimed at assessing the attitudes of the LGPS community towards current and potential future regulatory and policy initiatives, revealed several areas of anticipated impact over the next 10 years.

These included increased government demands to invest more in the UK (38 per cent), pensions dashboards (38 per cent), the green transition (35 per cent), and LGPS consolidation (29 per cent).

More broadly, the survey found that just over two-thirds (67 per cent) of those working in the LGPS believed that LGPS funds should become separate legal entities from the authority, while just over half (52 per cent) said pension boards should remain part of the LGPS governance.

In addition to this, just over a quarter (26 per cent) thought that administration services should be consolidated within the LGPS.

However, this increased to 39 per cent among those who believed major reforms to the pension regime were needed, compared to 10 per cent among those who believe it only requires minor reform.

Looking at the future regulation of the LGPS, the study found that 62 per cent of respondents were in favour of having one regulator for both defined benefit (DB), defined contribution (DC) private pensions and funded and unfunded public sector pensions.

It also found that a quarter (25 per cent) of all respondents believed the LGPS should be regulated by the Department for Work and Pensions (DWP) by 2035.

However, funds were more likely to believe they should be regulated by The Pensions Regulator (TPR) (29 per cent) than by DWP (23 per cent).

When asked about future regulation and supervision of the LGPS, one in five said TPR (21 per cent) or the Department for Levelling Up, Housing and Communities (19 per cent) should regulate the LGPS by 2035, while "very few" (2 per cent) thought the LGPS should be regulated by HM Treasury.

There were also mixed views on consolidation among LGPS funds, with 43 per cent of respondents in support of it and 32 per cent opposing it.

Those in favour of consolidation said the main benefits were overall lower costs (60 per cent), better administration (47 per cent), governance improvements (44 per cent), better delivery of member services (44 per cent) and improved investments (42 per cent).

Meanwhile, the main disadvantages included lack of pension fund control (54 per cent) and lack of accountability (54 per cent).

A third also felt there are timing implications (37 per cent), while a similar proportion (35 per cent) believe it could impact pooling arrangements in the future.

The opinions on the ideal number of funds also varied, as 36 per cent said there should be the same number of funds as now, while 24 per cent said there should be about half the number, and a further 24 per cent said there should be about a quarter of the number of funds as there currently are.

Commenting on the survey, PLSA deputy director of policy, Joe Dabrowski, said: “The LGPS operates in a complex regulatory environment with different parts of the LGPS required to report to a number of disparate bodies.

“We have called for the new government to put into action the recommendations from the LGPS Scheme Advisory Boards’s ‘Good Governance Project’ to develop a common standard on governance, and foster effective relationships between pensions funds and asset pools with a focus on the type and quality of outcomes administering authorities should aim to achieve.”

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