A paragon amongst pension schemes?

As the pension reform debate has raged there has been one line heard loud and clear: the Local Government Pension Scheme (LGPS) is the goody two shoes who should not be lumped in with a bunch of miscreants just because it happens to be in the public sector.

So, when critics complain of the financial burden presented by pension liabilities, fans point out that the LGPS has an investment fund with which to pay pension benefits and does not rely on the Treasury. When the chancellor called for employees to pay more towards their pensions, scheme supporters pointed out that staff already pay a good whack towards the costs of the scheme: a minimum of 6.5%, compared to as little as 1.5% in funds such as the civil service’s pension fund, LGPS supporters could continue.

Similarly when Lord Hutton, during his inquiry into the state of public sector pensions, criticised the lack of information about pension funds and called for greater transparency, the Local Government Association replied: “The LGPS is fully transparent and more accountable than any other public sector pension scheme.”

However, after spending several weeks trying to get 2010 valuation reports from the 89 funds that are set to publish them, I would dispute the claim that the LGPS is “fully transparent”.

While many funds do publish their valuation results - alongside annual reports, funding strategies and other documents - on their website, many other fund valuation reports are only available on request. A formidable barrier to transparency when you are talking about almost 100 reports in total.

Furthermore, requests for full transparency were often treated with intense suspicion and I am still waiting for a number of pension funds to call back and let me know if they can send me the information (funds without links on my valuations table will tell you who).

I also came across severe obstruction. Kingston upon Thames Pension Fund told me I could only have the document if I submitted a Freedom of Information request. Would they release it if I did so, I asked. Yes, they replied. So why not just give it to me now?

Much worse were those funds which are not prepared to publish the document at all. Teeside Pension Fund told me the valuation report would not be publicly available, ditto the Environment Agency.

So while the LGPS has many virtues, I’m not sure “fully transparent” is one of them.

And until the scheme sorts this out, it is destined to fail another of Lord Hutton’s recommendations, number 21: that “centrally collated data, covering all LGPS funds, should be published, including fund comparisons which, for example, clarify and compare key assumptions about investment growth and differences in deficit recovery plans”.

Not quite the paragon after all.