The people charged with managing and overseeing individual funds in the Local Government Pension Scheme (LGPS) have a big task keeping up with all the relevant topics.
Asking them how confident they are is a good way to gain insight into their knowledge and understanding on key pension and governance topics.
During the summer, Hymans Robertson undertook an extensive exercise to assess the confidence of the local decision making and oversight group that manages the 100 local government pension funds across the UK.
More than 50 LGPS funds participated in this first ever national confidence assessment of pension committee and local pension board members.
We developed the questionnaire based on the eight headline requirements within the Chartered Institute of Public Finance and Accountancy’s knowledge and skills framework, supplementing it with details from The Pensions Regulator’s code of practice 14 and recent hot topic issues such as investment pooling.
Respondents were asked to assess their confidence on each of the 29 questions, from not confident through to completely confident. By the end of the assessment, on 10 August, more than 250 committee and local pension board members had completed the survey.
So what did the assessment tell us? The chart gives some headline insights.
What proportion of responses were mostly or completely confident?
It is important to highlight that this was a self-assessment: indicating how participants felt, rather than checking their actual knowledge and understanding.
However, the results were clear in affirming that committee and local pension board members do feel largely confident in their knowledge and understanding on all topics assessed. The topic area respondents were most confident on was committee role and pensions legislation and the area of least confidence was pensions accounting and audit standards.
One clear trend in the survey results was that respondents are noticeably more confident on topics that have been traditionally given more time on committee agendas than in some others, such as pension administration, where committees may not have had the same level of exposure.
This is not surprising, but it is important to note that members should be aiming for the same level of confidence on all areas under their responsibility.
Chairs of both committees and boards – 41 of them – are more confident in all topic areas than the remaining respondents, but we are pleased that the gap between chairs and the remaining members is not significant. It suggests that an appropriate level of challenge exists in committees and local pension boards.
The high confidence reported is pleasing and reflects well on participants’ engagement in training. Funds may now wish to directly assess committee and board members knowledge in key areas and see how this measures against the national confidence results.
Due to both the changing membership on committees and local pension boards and the changing nature of the pension’s landscape, providing training plans that maintain strong knowledge and understanding levels is an important ongoing task for all funds.
Ian Colvin, head of LGPS benefits consultancy and governance, and Andrew McKerns, benefits and governance consultant, Hymans Robertson
Column sponsored and supplied by Hymans Robertson