Councils that administer local government pension scheme funds may find it difficult to recruit people to their pension boards with enough experience and knowledge.
That warning came from the Local Authority Pension Fund Forum, a shareholder engagement group that brings together 60 local authority pension funds.
From April 2015, governance and administration of the LGPS will fall under the remit of The Pensions Regulator, which currently only oversees private sector schemes. As part of the move to improve the governance of the LGPS, administering authorities must create pension boards, similar to trustee boards of private sector schemes, to run pension funds.
However, LAPFF forum officer Keith Bray told the LGC Pension Fund Symposium last week that there were fears councils would not be able to find members for the boards with the standard of knowledge TPR requires.
Draft regulations on pension boards were published on 23 June. Referring to them, Mr Bray said: “Members [of boards] must have the relevant experience and knowledge. There could be a hiring problem here.”
Pension boards must have an equal number of employer and employee representatives and consist of at least four members. Employer or employee representatives cannot be elected members, although councillors may sit on the board.
However, Barnet LBC head of treasury Iain Millar said his authority was “keen on local councillor control” of the pension boards and suggested councillors may oppose the distinction between board members.