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The publication of Scheme Guidance from DCLG reflects HMG in ‘listening mode’
London 19.00 (BST) The Local Authority Pension Fund Forum (LAPFF) today welcomed the new Guidance from the Department for Communities and Local Government (DCLG) on ‘Preparing and Maintaining an Investment Strategy Statement’[i]. test Cllr Kieran Quinn, Chair of the Forum and also the Greater Manchester Pension Fund, said, “The real value of this new Guidance is that it reflects many of the views submitted to Government by funds about the challenges facing their plans for pooling and the new investment frontiers for local authority pension funds.”
LAPFF also welcomed the new guidance with regard to pension fund governance in the context of pooling. The renewed emphasis on the autonomous role of the funds, and the need for pools to be accountable to their individual member funds is crucial for the success of pooling.
In re-establishing the need for funds to manage their ESG commitments more effectively, the Guidance makes two very important new points: the requirements for funds to commit to the UK Stewardship Code which LAPFF fully supports; and the requirement for funds to have a policy on corporate governance and voting in place. This closes the door on those who have ignored their responsibilities by assuming that not having a policy is acceptable.
The added emphasis on the essential role of the Scheme Advisory Board (SAB) and designating new responsibilities to the Board is also to be welcomed. Strengthening the SAB will support member-direction over the pace and nature of change being undertaken through pooling. There has been concern amongst councillors that their involvement in the process of change has not been sufficiently prioritised in the detailed discussions occurring at officer level to get pooling done.
Cllr Quinn, said “The Forum is pleased to note the Guidance reflects several of the key concerns exercising LAPFF member funds over the last few months about the direction of travel that pooling was taking. This new Guidance alters that course for the better.”