LGPS governance review sets out s151 training steps

The latest phase of an ongoing Local Government Pension Scheme governance review has detailed its plans for making sure section 151 officers are properly schooled in their fund-related duties.

One of the findings of pensions adviser Hymans Robertson’s original Good Governance Review, published in August, was an identified need for “enhanced levels of training” for key LGPS officers.

However it stopped short of recommending the creation of separate s151 officers for funds.

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Hymans’ latest update on the review – the implementation plan based on two separate workstreams – recommends that continuing professional development (CPD) arrangements for local authority s151 officers should be updated to ensure levels of knowledge and understanding are up to scratch.

“Administering authorities must publish a policy setting out their approach to the delivery, assessment and recording of training plans to meet those requirements,” it said.

“CIPFA and other relevant professional bodies should be asked to produce appropriate guidance and training modules for s151 officers and to consider including LGPS training within their training qualification syllabus.”

Elsewhere, the phase two report calls for statutory guidance to set out the standards that LGPS funds are expected to meet, including a requirement to publish an enhanced governance compliance statement each year, signed off by the s151 officer, setting out how the fund complies with its responsibilities.

Oversight on the ouctomes-based approach will come from a biennial independent governance review for every fund designed to provide an expert arms-length assessment of its governance arrangements. 

Hymans said the Local Government Association was also looking at the potential to extend its peer-review programme to the LGPS to boost the sharing of best practice within the sector.

Catherine McFadyen, head of LGPS actuarial, benefits and governance at Hymans Robertson, said the recommendations contained in the latest phase of the project had the backing of The Pensions Regulator and were the subject of ongoing development work with the LGPS scheme advisory board (SAB).

“The SAB is continuing to progress the work to improve governance in the LGPS and the working groups established to achieve this aim to capture the existing best practise across the funds and set that as the standard for everyone to achieve,” she said.

“Good Governance phase two builds on the project’s earlier proposals to strengthen the governance and administration of the LGPS.”

While the Good Governance Review opted not pursue the idea of dedicated s151 officers for individual funds, the review’s phase two recommendations include proposals for each LGPS administering authority to have a “single named officer” responsible for the delivery of “all LGPS related activity for that fund”.

While the role may be undertaken by the administering authority’s s151 officer, the latest report recognises that it may not be the case that the relevant statutory officer has the capacity to do so.

“The LGPS senior officer role may be undertaken by another officer who has the remit of delivering the LGPS function in its entirety and who is suitably qualified and experienced,” it says.

The proposals, which are ultimately expected to become statutory guidance, said that where a fund’s senior officer and the administrating authority’s s151 officer were not the same person, both would be expected to sign off on the fund’s annual governance compliance statement.

Another measure contained in the phase two report is a strengthening of transparency arrangements for the conflicts of interest policies of individual funds.

Hymans said some administering authorities only focused on elected-member-related conflicts of interest – potentially missing out commercial relationships between bodies, such as cross-charging or shared-services arrangements. 

The phase two report recommended that funds should publish conflicts of interest policies that addressed how “actual, perceived and potential” issues were addressed, and that it should refer to “all those involved in the management of the LGPS”.

The next phase of the review includes working up a set of key performance indicators and drafting instructions for revised statutory guidance on governance compliance statements. 

The draft proposals are expected to go the SAB in February.

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