Governance
The Governance of the Local Government Pension Scheme is overseen by the Scheme Advisory Board, which assists the Ministry of Housing, Communities and Local Government in fulfilling its statutory duties. The Board’s secretariat is hosted within the Local Government Association, and it has established a Compliance and Reporting Committee to promote clear transparent reporting to stakeholders. The LGPS also follows guidance from the Pensions Ombudsman.
Who runs the LGPS?
The LGPS is one of the largest pension schemes in the UK. It is a national pension scheme for people working in local government or working for other employers that participate in the Scheme. The LGPS in England and Wales is administered locally by 86 local pension funds.
LGPS rules
The Scheme rules can only be changed with the approval of Parliament. Changes to the rules are discussed at a national level by employer and employee representatives. Shropshire Pension Fund will inform you if the Scheme rules change. We will do this as soon as possibly can, which must be within three months of the change.
The LGPS is a qualifying scheme that meets the Government’s standards for automatic enrolment. If you have chosen to opt out of the LGPS, your employer is required to bring you into the Scheme every three years, depending on your age and earnings.
The LGPS is a registered public service pension scheme. This means that a member receives tax relief on the contributions that they pay, subject to certain limits.
Local Pension Boards
Shropshire Pension Fund operates a Local Pension Board. The Pension Board helps the pension fund comply with the LGPS rules, overriding pensions legislation and guidance from the Pensions Regulator. The Pension Board is made up of equal numbers of employer and member representatives.
Fund management arrangements
The Shropshire County Pension Fund is managed in a collaborative way. This means that the decision-making powers are delegated to the Pension Committee who take regulated advice from external professionals. These external professionals consist of the Scheme Actuary and their team, the Investment Consultancy, and the Independent Advisor(s). It is the Fund’s officers, in collaboration with these external bodies who propose the agenda for each quarterly Pension Committee meeting and agree this in advance with the Chair. Papers are presented by a mixture of officers, consultants and third-party providers such as investment managers or custodians. (For further information, please see the link below)
Fund actuary and other external specialist advisors
The LGPS Regulations require that the Fund appoint an actuary to carry out a triennial valuation of the Shropshire County Pension Fund and to undertake other employer related actuarial services. The Shropshire County Pension Fund actuary is Mercers Investment Consulting.
Fund auditors
The Shropshire County Pension Fund’s external auditors are Grant Thornton who present an audit plan and audit report to the Fund.
Fund custodian
The Shropshire County Pension Fund’s global custodian is Northern Trust. It holds in safe custody the majority of the investments of the Shropshire County Pension Fund other than physical/workforce-related property or cash.
Training
All Committee members and members of the Local Pension Board are encouraged to attend relevant training to ensure they fully understand their role and responsibilities.
Members take part in an annual Knowledge and Skills Assessment provided by the Fund’s Actuary, Hymans Robertson, this assessment enables officers to schedule in relevant training for Committee Members and the Local Pension Board.
Training is often provided by the Fund’s partners and is included in the Forward Plans for the Pension Committee and the Local Pension Board.
Training provided by the Fund is either online or based in Shrewsbury and previous training sessions are available online.
Any additional training opportunities are circulated to members. Officers also forward details of relevant conferences.
Our governance compliance statement explains, also, how the Shropshire County Pension Fund is governed. The below chart show how the layers of governance work together.
Responsible engagement and investments
We take ethical investments very seriously and we do this by influencing companies from the inside. We use F&C to actively engage with a wide range of companies including having face to face meetings with them to promote corporate social responsibility and high standards in corporate governance amongst those in which we invest. We also believe that voting at annual meetings is important. By voting at these meetings, we can express our views on the level of board independence and pay contracts for senior executives, for example. We're also a member of the Local Authority Pension Fund forum. 60 local authority pension funds are members of the forum representing 75% of local government pension funds by value of assets. This gives the forum bargaining power when it talks to companies and influencing the way they behave.
We've also chosen to engage with companies on social and environmental issues. We employ F&C Asset Management to enter into sustained and constructive dialogue with UK companies via a Responsible Engagement Overlay programme. The programme aims to encourage companies to enhance their business performance by adopting better social and environmental practices.
