Edward Bogira, Head of Digital & Communications, PLSA.
After three long years it was fantastic to be able to host the PLSA Local Authority Conference once again in-person at the fabulous Cotswold Water Park. The event was supported by over 300 delegates, exhibitors and speakers.
During the course of three days we saw the culmination of a year-long PLSA research project aimed at future-proofing the LGPS.
The report begins by reflecting on the resilience of the LGPS during more than decade of rapid change marked by the financial crisis, austerity and pay freezes for local authorities, a global pandemic and a rolling series of reforms including pooling, responsible investment regulations and McCloud.
It outlines some of the challenges – from the difficulty in navigating regulation to resourcing, recruitment and retention – and makes 24 recommendations to fortify the scheme so that the next 10 years might be easier to navigate than the last.
The report is vital reading for everyone involved in the LGPS and the PLSA and its Local Authority Committee is looking forward to developing the recommendations into an action plan for the future.
We were also presented the LGPS Advisory Board’s annual report which emphasised the strength of the scheme, with total assets up 23.4% to £342 billion in the year to 31 March 2021, total membership up to 6.2 million savers and more than 14,000 active employers.
There was an interesting session on enhancing user experience and combating pension fraud. It seems that the tech innovation in combating pension fund fraud is being driven by pensioners themselves, who are asking for greater online security with their pension, even though the stereotype is often that older people are not engaged with technology. The other driver is coming from the rise in scams and online fraud during Covid, and from an increasingly digitised world more generally. However it is becoming increasingly difficult to ask users to adopt online tech innovation if they are pensioners living abroad or in remote areas, who might not have an internet connection or regular access to it. Other challenges also remain for those unable (e.g. poor eyesight) or unwilling to engage with new online technology.
Pooling has introduced new stewardship challenges for the LGPS. Norfolk Pension Fund, with Robbins Geller Rudman & Dowd’s representation, won a case against an American pharmaceutical company it had invested in, when the company was found to have been involved in fraudulent behaviour and lost fund money. As a result, Norfolk Pension Fund managed to recover 100% of the assets lost by investing in this international company. Funds may feel that they don’t have the resources (money, time, staff) to be embroiled in this kind of litigation, but this case study is an example that it is possible and it can be worth the effort.
And there was much discussion, both in the sessions and in the refreshment breaks, about the TCFD regime which will soon be coming to the LGPS. Pinsent Mason’s Nick Stones reassured attendees that the experience in the private sector is that the regulators are fully expecting that not all the data will be available and that the regime shouldn’t force you to invest one way or another, but that it’s designed to help make more informed investment decisions and embed climate risks and opportunities in funds’ processes.
The now longest-serving Minister for Pensions’ timely remarks in the Sunday Times created much cause for conference chatter as he questioned the sustainability of public sector pensions. The talented students from Debate Mate argued entertainingly back and forth about the extent to which the LGPS was sustainable, with the room – unsurprisingly – favouring defeating the motion that it wasn’t.
Bringing the pensions industry together is such an important part of our job at the PLSA and over the course of this conference it is clear how important it is to bring this particular sector together.