DRAFT GOVERNANCE COMPLIANCE STATUTORY GUIDANCE –
VERSION II – JULY 2008
PART I
INTRODUCTION
1. This guidance is issued to all administering authorities in
2. The guidance includes a combination of descriptive text explaining the rationale of each compliance principle, and also a description of the relevant statutory provision of The Local Government Pension Scheme (Administration) Regulations 2008 (“the 2008 regulations”) (Regulation 31 refers), and its predecessor, regulation 73A of The Local Government Pension Scheme Regulations 1997 (as amended), that requires LGPS administering authorities to measure their governance arrangements against the standards set out in this statutory guidance. Where compliance does not meet the published standard, there is a requirement under Regulation 31(3)(c) to give, in their governance compliance statement, the reasons for not complying.
3. The Secretary of State will keep the content of the guidance under review in the light of administering authorities and other interested parties’ experience of applying the best practice standards. The guidance will be updated as necessary to reflect this and subsequent legislative changes.
BACKGROUND
4. The LGPS is a common
scheme throughout
5. As a statutory public service scheme, the LGPS has a different legal status compared with trust based schemes in the private sector. Matters of governance in the LGPS therefore need to be considered on their own merits and with a proper regard to the legal status of the scheme. This includes how and where it fits in with the local democratic process through local government law and locally elected councillors who have the final responsibility for its stewardship and management. The LGPS is also different in the respect that unlike most private sector schemes where the accrued benefits payable to members are always subject to the risk of scheme under-performance or even failure, the accrued benefits paid by local authorities are established and payable according to statute and underpinned from local authority revenue and not the pension funds themselves. In simple terms, the pension funds exist to defray the pension costs incurred by the local authority . On this basis, it is the local authority itself, and local council tax payers, who bear the financial and investment risks of the scheme.
6. The word “trustee” is often used in a very general sense to mean somebody who acts on behalf of other people but in pensions law it has a more specific meaning. Most occupational pension schemes, primarily in the private sector, are established under trust law. Under a trust, named people (trustees) hold property on behalf of other people (beneficiaries). Trustees owe a duty of care to their beneficiaries and are required to act in their best interests, particularly in terms of their investment decisions. Although those entrusted to make statutory decisions under the LGPS are, in many ways, required to act in the same way as trustees in terms of their duty of care, they are subject to a different legal framework, which derives from public law. In particular, local authority councillors are subject to all the normal duties and responsibilities that come with their office. But they are not trustees in the strict legal sense of that word.
7. Trustees of private
sector schemes ensure
better scheme security, prevent employer-led actions which could undermine a
scheme’s solvency and seek
to ensure that investment and other
decisions are both prudent and fair.
While the public law framework
applying to LGPS schemes will require similar standards of behaviour and
practice by members of pension committees, who in this respect also fulfil a
fiduciary role, a key distinction to be made is that LGPS benefits are established
and paid under statute. Administering
authorities are therefore subject to a statutory obligation that they are
required to meet, irrespective of their scheme’s investment performance or
general funding position. As such, scheme members in the LGPS are not subject
to the same type of benefit risk as those in trust-based pension schemes. The
entitlements and benefits payable to scheme members in trust based schemes are,
potentially at least, more volatile and dependent ultimately on the
effectiveness and stewardship of their trustees working as they must under the constraints of the employers’
overall covenant standing behind the scheme. This
perceived risk to security was the main motivation for the inclusion of the
member-nominated trustee provisions in the Pensions Act 1995 as a result of
which the principle that scheme beneficiaries should be part of the decision
making process became established. But even member nominated trustees must act
in the interest of the beneficiaries and must not take decisions out of
self-interest or because they have in mind a particular agenda. The Pensions
Act 2004 simply extends that status.
8. On the one hand, elected councillors have legal responsibilities for the prudent and effective stewardship of LGPS funds and in more general terms, have a clear fiduciary duty in the performance of their functions. However, it is equally clear that the beneficiaries of the scheme have an interest in the beneficial title to the assets and the legal right to require that the assets are held and managed on their behalf in accordance with the governing legal instrument, in this case, the LGPS regulations. In this respect, elected councillors have a duty of care that goes beyond the strict fiduciary duty to employers and tax payers. Although there is no one single model in operation throughout the 89 LGPS fund authorities in England and Wales, most funds are managed by a formal committee representing the political balance of that particular authority. Under section 101 of the Local Government Act 1972, a local authority can delegate their pension investment functions to the Council, committees, sub-committees or officers, but there are a small number of LGPS fund authorities which are not local authorities and therefore have their own, distinct arrangements.
9. It is also relevant to note that under The Local Authorities (Functions and Responsibilities) (England) Regulations 2000 (SI 2000 No 2853) and The Local Authorities Executive Arrangements (Functions and Responsibilities) (Wales) Regulations 2001 (Welsh SI 2001 No 2291), statutory decisions taken under schemes made under sections 7, 12 or 24 of the Superannuation Act 1972, are not the responsibility of the executive arrangements introduced by the Local Government Act 2000. This means, for example, that the executive cannot make decisions in relation to discretions to be exercised under the LGPS, or make decisions relating to the investment of the pension fund and related matters. These functions have continued to be subject to the same legislative framework as they were before the passing of the Local Government Act 2000, including delegations under section 101 of the Local Government Act 1972. Such delegations vary from local authority to local authority depending on local circumstances. However, the Secretary of State has advised that where such decisions were delegated to committees or to officers, then those delegations should continue. (see paragraphs 5.10 and 5.11 of the Statutory Guidance to English Local Authorities – New Council Constitutions : Guidance Pack Volume 1)
10. Under section 102 of the Local Government Act 1972, it is for the appointing council to decide upon the number of members of a committee and their terms of office. They may include committee members who are not members of the appointing council and such members may be given voting rights by virtue of section 13 of the Local Government and Housing Act 1989. On this basis, it is open to pension committees to include representatives from district councils, scheme members and other lay member representatives, with or without voting rights, provided that they are eligible to be committee members (eligibility rules are set out in section 15 of the Local Government and Housing Act 1989).
STATUTORY BACKGROUND
11. In response to
proposals issued by the former Office of the Deputy Prime Minister, the Local
Government Pension Scheme Regulations 1997 were amended to require LGPS
administering authorities to publish details of their governance and
stewardship arrangements by
12. With effect from 1 April 2008, the responsibility to review
and, where necessary, revise their governance compliance statements published
under Regulation 73A of The Local Government Pension Scheme Regulations 1997,
is set out in Regulation 31 of the 2008 regulations :-
“Pension funds : governance compliance statement
31—(1) This regulation applies to the written statement prepared and published by an administering authority under regulation 73A of the 1997 Regulations ([1]).
(2) The authority must—
(a) keep the statement under review;
(b) make such revisions as are appropriate following a material change in respect of any of the matters mentioned in paragraph (3); and
(c) if revisions are made—
(i) publish the statement as revised, and
(ii) send a copy of it to the Secretary of State.
(3) The matters are—
(a) whether the authority delegates its function, or part of its function, in relation to maintaining a pension fund to a committee, a sub-committee or an officer of the authority;
(b) if it does so—
(i) the terms, structure and operational procedures of the delegation,
(ii) the frequency of any committee or sub-committee meetings,
(iii) whether such a committee or sub-committee includes representatives of employing authorities (including authorities which are not Scheme employers) or members, and, if so, whether those representatives have voting rights;
(c) the extent to which a delegation, or the absence of a delegation, complies with guidance given by the Secretary of State and, to the extent it does not so comply, the reasons for not complying.
(4) In reviewing and making revisions to the statement, the authority must consult such persons as it considers appropriate.
It is
important to note that the scope of this statutory guidance is restricted, by
virtue of regulation 31(3)(c) above, to issues concerning the extent to which
the way in which an authority has chosen to delegate its functions complies
with the best practice principles set out below. Although outside the scope of
regulation 31(3)(c), we think it is good practice for LGPS fund authorities as
part of their governance and stewardship arrangements, to have robust risk
management processes and policies to manage conflicts of interest in place.
However, these are separate and specialist topics and so are not covered in
depth here. We intend to work with CIPFA and other relevant parties on these
topics to develop supplementary general advice and guidance notes on these
important governance matters for LGPS funs.
PURPOSE
13. The purpose of this guidance is two fold. Firstly, Part II of the guidance provides a detailed description of each of the best practice principles against which compliance is to be measured (with each of the principles being set out in bold type) and secondly, it includes guidance on how the compliance statement in Part II should be completed.
TERMINOLGY
14. Throughout this paper, the distinction is made between those committees or sub-committees that have been formally constituted under 101 of the Local Government Act 1972 (“main committees”) and other committees or panels that have been established outside of that provision (“secondary committees”). Unless reference is made to “elected members”, the word “member” where it appears in the text is used to denote any member of a main or secondary committee, whether elected or not.
POSITION OF NON-LOCAL AUTHORITY
ADMINISTERING AUTHORITIES
15. Regulation 73A of the
Local Government Pension Scheme Regulations 1997 and this guidance made under
powers granted by Regulation 73A(1)(c) of those regulations apply equally to
all LGPS administering authorities in
SUGGESTED
16. Although not a formal part of this guidance, it is recommended that administering authorities and other stakeholders should be aware of the contents of the following documents :-
a) Good Governance Standards for Public Services (Office for Public Management (Alan Langlands – January 2005)
b) Code of Corporate Governance in Local Government (CIPFA/SOLACE – 2007)
c) Institutional
Investment in the
d) Local Government Pension Scheme : Pension Fund Decision Making – Guidance Note (CIPFA Pensions Panel – 2006)
e) Guidance for Chief
Finance Officers : Principles for Investment Decision Making in the Local
Government Pension Scheme in the
f) Regulatory
Code of Practice no 7 : Trustee Knowledge and Understanding. The Pensions
Regulator, May 2006)
g)
Institutional Investment in the
h) Updating
the Myners principles : a consultation (HM Treasury, DWP, The Pensions
Regulator, March 2008)
PART II - THE PRINCIPLES
Part II/A - Structure
17. Elected members have legal responsibilities for the prudent and effective stewardship of LGPS pension funds and, in more general terms, have a clear fiduciary duty to participating employers; local tax payers and scheme beneficiaries, in the performance of their functions. Although there is no one single model in operation throughout the 89 fund authorities in England and Wales, most finds are managed by a formal committee representing the political balance of that particular authority. Under section 101 of the Local Government Act 1972, a local authority can delegate their statutory functions to the Council, committees, sub-committees or to officers, but there are a small number of fund authorities which are not local authorities and therefore have their own, distinct arrangements (see para 15 above).
18. The formal committee structures operated by individual pension fund authorities reflect local circumstances and priorities and it is not the remit of this guidance to prescribe a “one size fits all” approach. The evidence collected by Communities and Local Government in 2006 indicated that the overwhelming majority of these committees operate efficiently and effectively despite the variations in their constitution, composition and working practices. The intention is not therefore to level out these differences but instead to ensure that these different structures reflect the best practice principles described below :-
a. The
management of the administration of benefits and strategic management of fund
assets clearly rests with the main committee established by the appointing
council.
b. That
representatives of participating LGPS employers, admitted bodies and scheme
members (including pensioner and deferred members) are members of either the main
or secondary committee established to underpin the work of the main
committee.
c) That where a
secondary committee or panel has been established, the structure ensures
effective communication across both levels.
d) That where a
secondary committee or panel has been established, at least one seat on the
main committee is allocated for a member from the secondary committee or panel.
Part II/B - Representation
19. Under section 102 of the Local Government Act 1972, it is for the appointing council to decide upon the number of members of a committee and their terms of office. They may include committee members who are not members of the appointing council and such members may be given voting rights (see Part II/C) by virtue of section 13 of the Local Government and Housing Act 1989. On this basis, it is open to pension committees to include representatives from district councils, scheme member and other lay member representatives, with or without voting rights, provided that they are eligible to be committee members (eligibility rules are set out in section 15 of the Local Government and Housing Act 1989)
20. The number of stakeholders affected by the local management of the pension scheme and governance of pension funds is vast and it is accepted that it would be impractical to expect individual committee structures to encompass every group or sector that has an interest in the decisions that fall to be made under the scheme’s regulations. The following principles are therefore intended to ensure that the composition of committees, both formal and secondary, offers all key stakeholders the opportunity to be represented. For example, deferred and pensioner scheme members clearly have an interest in the performance of pension committees but it would be impractical in many cases to expect them to have direct representation on a committee. Instead, there is no reason why a representative of active scheme members couldn’t also act on behalf of deferred and pensioner scheme members. Similarly, a single seat in the committee structure could be offered to somebody to represent the education sector as a whole, rather than having individual representatives for FE Colleges, Universities, academies, etc.
21. An independent professional observer could also be invited to participate in the governance arrangement to enhance the experience, continuity, knowledge, impartiality and performance of committees or panels. Such an appointment could improve the public perception that high standards of governance are a reality and not just an aspiration. Moreover, the independent observer would be ideally placed to carry out independent assessments of compliance against the Myners’ principles, both in terms of the 2004 follow up report and the latest NAPF consultation on next steps, together with other benchmarks that the fund authority’s performance is measured against. The management of risk is a cornerstone of good governance and a further role for the independent observer would be to offer a practical approach to address and control risk, their potential effects and what should be done to mitigate them and whether the costs of doing so are proportionate. It is accepted, however, that certain fund authorities may have devised, or wish to devise, other ways of ensuring the effective scrutiny of their decision-making and performance and it should therefore be borne in mind that the appointment of an independent observer is not to be taken as an absolute requirement in this guidance, provided that authorities are satisfied that their alternative arrangement would match the sort of standards rehearsed in the NAPF’s follow-up report on the Myners’ principles (recommendation 7) and the government’s response to it published in March 2008.
a) That all key stakeholders are
afforded the opportunity to be represented. within the main or secondary committee
structure. These include :-
i) employing authorities (including non-scheme
employers, eg, admitted bodies);
ii) scheme members (including deferred and
pensioner scheme members),
iii) where appropriate, independent
professional observers, and
iv)
expert advisors (on an ad-hoc basis).
b) That where
lay members sit on a main or secondary committee, they are treated equally in
terms of access to papers and meetings, training and are given full opportunity
to contribute to the decision making process, with or without voting rights.
Part II/C - Selection and role of lay members
22. It is important to emphasise that it is no part of the fund authority’s remit to administer the selection process for lay members sitting on main or secondary committees or to ensure their attendance at meetings, unless they wish to do so. Their role is to determine what sectors or groups are to be invited to sit on LGPS committees or panels and to make places available. Effective representation is a two way process involving the fund authorities providing the opportunity and the representative bodies initiating and taking forward the selection process under the general oversight of the fund authority.
23. Members of a main decision-making LGPS committee are in a similar position as trustees in the private sector. Trustees owe a duty of care to their beneficiaries and are required to act in their best interests at all times, particularly in terms of their investment decisions. They are not there to represent their own local, political or private interest. On a main committee in the LGPS, the fiduciary duty to employers, taxpayers and scheme beneficiaries must always be put before the interests of individuals, individual groups or sectors represented on the committee, whereas on secondary committees or panels that are not subject to the requirements of the Local Government Act 1972, private interests can be reflected in proceedings.
a) That
committee or panel members are made fully aware of the status, role and
function they are required to perform on either a main or secondary committee.
b) That at the
start of any meeting, committee members are invited to declare any financial or
pecuniary interest related to specific matters on the agenda
Part II/D – Voting
24. Although the 2006 survey conducted by Communities and Local Government revealed that formal votes taken by LGPS committees were rare, it is important to set out the legal basis on which voting rights are, or may be prescribed to elected and lay members.
Elected members of the
administering authority
a) All elected members sitting on LGPS committees have voting rights as a matter of course. Regulation 5(1)(d) of the Local Government (Committee and Political Groups) Regulations 1990 (SI No 1553/1990) provides that voting rights will be given to a person appointed to a sub committee of a committee established under the Superannuation Act 1972 who is a member of the authority which appointed the committee.
Elected
members of authorities other than the administering authority and lay members
b) Under sections (13)(1)(a) and (2)(a) of the Local Government and Housing Act 1989, a person who is a member of a committee appointed by an authority under the Superannuation Act 1972 but who is not a member of that authority, shall be treated as a non-voting member of that committee. However, the provisions of section 13(3) and (4) of the 1989 Act allow an administering authority discretion as to whether or not a member of a committee is treated as a voting or non-voting member.
Lay members of advisory
panels, etc
c) Because they are not formally constituted committees, secondary committees or panels on which lay members sit are not subject to the restrictions imposed by the Local Government Act 1972 on voting rights. In these circumstances, there is nothing to prevent voting rights being conferred by the administering authority on all lay members sitting on panels or informal committees outside the main decision making committee.
25. The way in which an administering authority decides to exercise its discretion and confer voting rights on lay members is not a matter for which the Secretary of State, under his regulations making powers under the Superannuation Act 1972, has any remit. The issue of whether voting rights should be conferred on district council or scheme member representatives, for example, is a matter for individual administering authorities to consider and determine in the light of the appointing council’s constitution. Regulation 73A(1)(b)(iii) of the 1997 Regulations already requires an administering authority to include in their statement details of the extent to which voting rights have been conferred on certain representatives, but does not extend to the need to give reasons where this is not the case.
a) The policy
of individual administering authorities on voting rights is clear and transparent,
including the justification for not extending voting rights to each body or
group represented on main LGPS committees.
Part II/E – Training/Facility
time/Expenses
26. In 2001, the
Government accepted the ten investment principles recommended by Paul Myners in
his report, “Institutional Investment in the
27. The Local Government Pension Scheme (Management and Investment of Funds) Regulations 1998 (as amended) already requires administering authorities to report the extent of compliance with this principle. But on the wider issue of governance, it is equally important that they report on the extent to which training facilities, etc, are extended to lay members sitting on either main or secondary LGPS committees.
28. If all stakeholders represented on LGPS committees or panels are to satisfy the high standards set out in the Myners’ set of investment principles, it follows that equal opportunity for training, and hence facility time, should be afforded to all lay members. They too should have access to the resources that would enable them to evaluate the expert advice commissioned by the main investment committee and to comment accordingly. But the way that is achieved at local level is not a matter for national prescription, in particular, the policy adopted by individual administering authority or local authority on the reimbursement of expenses incurred by committee or panel members. On this basis, the best practice standard which administering authorities are required to measure themselves focuses on the extent to which they have a clear and transparent policy on training, facility time and reimbursement of expenses and whether this policy differs according to the type of member, for example, elected member or scheme member representative.
a) That in
relation to the way in which statutory and related decisions are taken by the
administering authority, there is a clear policy on training, facility time and
reimbursement of expenses in respect of members involved in the decision-making
process.
b) That where
such a policy exists, it applies equally to all members of committees,
sub-committees, advisory panels or any other form of secondary forum.
c) That the administering authority
considers the adoption of annual training plans for committee members and
maintains a log of all such training undertaken.
Part II/F – Meetings (frequency/quorum)
29. From the evidence collected in 2006 by Communities and Local Government, it is clear that the majority of administering authorities who have introduced a multi-level committee structure operate different reporting/meeting cycles for each committee or panel. In the case of main, formal committees, these tend to meet, on average, at least quarterly, though there are a few examples where meetings are held less often. As a general rule, it is expected that main committees should meet no less than quarterly. Although it is important that any secondary committees or panels should also meet on a regular and consistent basis, it is accepted that there should be no compulsion or expectation that there should be an equal number of main and secondary committee meetings. But as a matter of best practice, it is expected that secondary meetings should be held at least bi-annually.
30. Although the
overwhelming majority of administering authorities operate effective
representation policies, the evidence collected in 2006 by Communities and
Local Government revealed a small handful of authorities who restrict
membership of their committee’s to elected members only. In legal terms, this
is permissible, but in terms of best practice, it falls well short of the
Government’s aims of improving the democratisation of LGPS committees. In those
cases where stakeholders, in particular, scheme members, are not represented,
it is expected that administering authorities will provide alternative means
for scheme employers, scheme members, pensioner members, for example, to be
involved in the decision-making process. This may take for the form of employer
road-shows or AGMs where access is open to all and where questions can be
addressed to members of the main committee.
It must be emphasised,
however, that road shows or AGMs are not seen as viable alternatives to the
participation of scheme member representatives within an authority’s governance
arrangement. They are, in effect, to be seen as a matter of last resort in the
hopefully unlikely situation where an authority has decided to exclude scheme
member representatives from either their main or sub-committee.
a) That an
administering authority’s main committee or committees meet at least quarterly.
b) That an
administering authority’s secondary committee or panel meet at least twice a
year and is synchronised with the dates when the main committee sits.
c) That an administering authority who does not include
lay members in their formal governance arrangements, must provide a forum
outside of those arrangements by which the interests of key stakeholders can be
represented
Part II/G - Access
31. The people to whom the appointing council entrust with taking investment, and other statutory decisions, is a matter for that council to consider and determine. However, it is important that others, outside that formal decision-making process but involved in some capacity in the general governance arrangement, have equal access to committee papers and other documents relied on by the main committee in taking its decisions.
32. The fact that voting rights are not conferred on individual lay members should not put them on any less footing than those members who serve on the main committee with full voting rights. Secondary panels or committees have a clear role to underpin and influence the work of the main committee and can only do so where there is equal access.
a) That subject
to any rules in the councils constitution, all members of main and secondary
committees or panels have equal access to committee papers, documents and
advice that falls to be considered at meetings of the main committee.
Part II/H – Scope
33. Traditionally, LGPS committees have focussed on the management and investment of the funds under their supervision, with questions arising from the main scheme dealt with by officers with delegated authority under the council’s constitution. In recent times, however, and reflecting the trend towards de-centralisation, administering authorities have become responsible for formulating a significant number of policy decisions on issues like abatement, compensation and the exercise of discretions under the scheme’s regulations. These are key decisions which should be subject to the rigorous supervision and oversight of the main committee. And with the prospect of some form of cost sharing arrangement to be in place by March 2009, it is clear that there are other key scheme issues, outside the investment field, that main committees may need to address in the future. Given the not insignificant costs involved in running funds, LGPS committees and panels need to receive regular reports on their scheme administration to ensure that best practice standards are targeted and met and furthermore, to satisfy themselves and to justify to their stakeholders that the fund is being run on an effective basis. This would involve reviewing the committee’s governance arrangements and the effective use of its advisers to ensure sound decision making. Here, the use of an independent professional observer, free of conflicts of interest, would enable a wholly objective approach to be taken to the stewardship of the fund.
34. All this points to LGPS committees perhaps becoming more multi-disciplined than they have been in the past, with a consequential impact on, for example, membership and training. For example, if decisions are to be taken by LGPS committees that could impact on the cost-sharing mechanism, it is reasonable to expect scheme member representatives to be present on those decision making committees, given that those decisions could have a direct impact on the position of scheme members under the scheme.
35. Although the future may see LGPS committees having a broader role than at present, individual administering authorities may adopt different strategies to meet these new demands. The more traditional approach might be to extend the scope of existing investment committees to include general scheme and other administrative issues. But already, there is evidence to suggest that some administering authorities have opted instead to establish new sub committees to deal solely with the administration and communication of members’ benefits or other scheme issues. The purpose of this guidance is not to prescribe the way in which administering authorities develop and adapt to scheme developments. Instead, the intention is to increase the awareness that administering authorities and their committees must be flexible and willing to change to reflect scheme changes and wider pensions issues.
a) That
administering authorities have taken steps to bring wider scheme issues within
the scope of their governance arrangements
Part II/I – Publicity
36. A key component in improving the democratisation of LGPS governance arrangements is to increase the awareness that opportunities exist for scheme member representatives and LGPS employers, for example, to become part of these arrangements. But the onus for increasing awareness should not rest entirely with the administering authority. It is just as much the role of scheme member representatives and scheme employers to keep abreast of developments in this field and to play an active part in the selection and appointment of committee or panel members. This is best left to local choice and discretion. However, administering authorities are reminded that under Regulation 76B(1)(e) of the 1997 Regulations, the latest version of their Governance Compliance Statement must be included in their Pension Fund Annual Report.
a) That
administering authorities have published details of their governance
arrangements in such a way that stakeholders with an interest in the way in
which the scheme is governed, can express an interest in wanting to be part of
those arrangements.
Annexe A : Compliance Statement
Principle A
– Structure
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* Please use this space to explain the reason for non-compliance (regulation 73A(1)(c)/1997 Regulations/regulation 31(3)(c)/2008 Regulations) |
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Please use this space if you wish to add anything to explain or expand on the ratings given above :- |
Annexe B – Summary of CLG’s 2006 Survey on
Governance
LOCAL GOVERNMENT PENSION SCHEME
GOVERNANCE SURVEY - A SUMMARY
On
1. Main findings
a). Percentage of fund authorities with representation on main committee = 84%
b) Percentage of fund authorities with representation on second committees = 11%
c) Percentage of fund authorities with representation on advisory panels = 15%
d) Percentage of fund authorities with representation at AGMs, etc = 18%
e) Percentage of fund authorities with none of the above = 15% (11 authorities)
(English shire counties = 4 authorities)
(London Boroughs = 6 authorities)
(Mets + others = 0 authorities)
(Welsh Unitaries = 1 authority)
2. Membership of Committees
a) Average Number of members on all main committees= 10 (range = 3 to 20)
b)) English shire counties = 11 (range = 5 to 20)
c) London Boroughs = 8 (range = 4 to 15)
d) Mets + others = 15 (range = 10 to 20)
e) Welsh Unitaries = 8 (range = 3 to 16)
3. Frequency of Committee
Meetings
a) 86% of committees meet at least Quarterly
b) 2 committees meet twice per annum
c) 3 committees meet five times per annum
d) 5 committees meet six times per annum
4. Voting Rights
a) 4 authorities have conferred voting rights on lay members :-
· English shire counties = 2
·
· Mets and others = 2
· Welsh Unitaries = 0
b) 5 authorities have conferred voting rights to lay members on advisory panels :-
· English shire counties = 1
·
· Mets and others = 2
· Welsh Unitaries = 2
5. Number of “trustees”
a) Total number of members on main committees = 900
b) Total number of elected members on main committees = 650 (72%)
c) Number of lay members on main committees = 250 (28%)
6. Correlation between Governance
and Funding levels
a) No representation - Average funding level = 73% (range = 62% to 79%)
b) 1 item of representation - Average funding level = 72.3%) (range = 61% to 88%)
c) 2 items of representation - Average funding level = 76.5% (range = 64% to 94%)
d) 3 items of representation - Average funding level = 83.5% (range = 74% to 93%)
e) 4 items of representation - Average funding level = 79.5% (range = 77% to 82%)
(Average funding level of all
funds in
7. Correlation between Governance
and Investment Returns
a) No representation (11 funds) 03/04 Average = 25.7% (range = 22% to 30%)
04/05 Average = 13% (range = 10% to 17%)
b) 1 item of representation (47 funds) 03/04 Average = 25.4% (range = 20% to 30%)
04/05 Average = 13.1% (range = 9% to 20%)
c) 2 items of representation (19 funds) 03/04 Average = 23.5% (range = 20% to 29%)
04/05 Average = 11.7% (range = 7% to 15%)
d) 3 items of representation (2 funds) 03/04 Average = 24.5% (range = 24% to 25%)
04/05 Average = 12.5% (range = 12% to 13%)
e) 4 items of representation (2 funds) 03/04 Average = 23% (range = 22% to 24%)
04/05 Average = 13.5% (range = 13% to 14%)
REPRESENTATION LEVELS IN THE LGPS (
LGPS Funds with no form of representation :-
Buckinghamshire County Council
Cambridgeshire County Council
Worcestershire County Council
Hackney
Hounslow London Borough
Kensington & Chelsea London Borough
Corporation of
Redbridge London Borough
Wandsworth London Borough
City & County of
LGPS Funds with 1 form of representation :-
Gloucestershire County Council
Hampshire County Council
Hertfordshire County Council
Teeside Pension Fund
Northumberland County Council
Oxfordshire County Council
Warwickshire County Council
Wiltshire County Council
Barking
Barnet London Borough
Bexley London Borough
Bromley London Borough
Croydon London Borough
Ealing London Borough
Hammersmith & Fulham London Borough
Haringey London Borough
Harrow
Havering
Hillingdon London Borough
Lambeth
Lewisham London Borough
Merton
Newham London Borough
Southwark London Borough
Sutton
Tower Hamlets
City & County of
Gwynedd Pension Fund
Dyfed Pension Fund
LGPS Funds with 2 forms of representation :-
Bedfordshire County Council
Derbyshire County Council
Leicestershire County Council
Nottinghamshire County Council
Staffordshire County Council
Brent London Borough
Islington London Borough
Merseyside Pension Fund
Tyne & Wear Pension Fund
Environment Agency
Clwyd Pension Fund
LGPS Funds with 3 forms of representation:-
Tameside Pension Fund
LGPS Funds with 4 forms of representation :-
Note 1
Information relating to the following LGPS funds was not available at the time the survey was conducted :-
Northamptonshire County Council
Royal Borough of
City of
Powys County Council
Note 2
The four forms of representation referred to above include :-
· membership of scheme members (or their representatives) on formal investment/pension committees;
· membership of scheme members (or their representatives) on secondary, formal committees;
· membership of scheme members (or their representatives) on informal, advisory panels, or
· the opportunity to attend annual general meetings, fund roadshows, etc.
Department for Communities and
Local Government
Local Government and
Firefighters’ Pension Schemes Division
May 2006