With Local Government Pension Scheme (LGPS) pools set to grow further in size and responsibility as a result of recent government reforms, it cannot become a case of ‘us versus them’, the local authority funds versus the pools, Hymans Robertson has warned.

Speaking at the PLSA Local Authority conference, Hymans Robertson head of LGPS investment, Iain Campbell, said that “we need to keep partnerships that have been forged so far to ensure funds still feel strong ownership and have really good engagement with their boards".

"But we do think that is potentially at risk here," he clarified, "given the reform that the government is proposing, the vast range of decisions that funds will be handing over to the pools, it could well feel like you're a forced client”.

The government, which published its response to its ‘Fit for the Future' consultation alongside the final Pensions Investment Review in May, confirmed that the LGPS reforms will see assets currently split over 86 administering authorities consolidated into six pools.

Campbell noted that local authority pension funds, "once again, find themselves in a position where they're having to undergo a huge build with their pool”.

He also warned that “whilst it's not expected to be starting from scratch this time, many believe this might actually be quite a bigger task, building out a huge expansion of the capabilities and the responsibilities of the pool in a very short timescale, that 31st of March 2026 deadline”.

“And then once built, the pools will, of course, be very different, they will be much larger entities having far greater impact on fund investment outcomes, at risk, return, responsible investment, local impact, you name it," he continued.

“They're a single entity that's going to be managing all of your assets, advising on a strategic asset allocation, so you can see a huge range of responsibilities and very important roles that they are going to be playing for you.

“But this can't be an us and them. It can't be funds versus the pools,” he added.

According to Campbell, new funds joining the pools “could potentially change the dynamic and culture, so we believe special measures need to be taken in this process to make sure that strong partnerships continue in a positive way, as we think that's what's ultimately going to be in the best interest of all stakeholders in the LGPS”.

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