Local Government Pension Scheme meaning

What is the background to the Pension Schemes Bill? The Pension Schemes Bill reached the House of Commons on 5 June 2025, which was hardly unexpected. It had featured in the King’s Speech at the State Opening of Parliament for the new Labour Government in July 2024, and has been referenced on numerous occasions since. As is common with pensions legislation, it was designed to encompass a variety of issues, several of which had been under consideration by the Department of Work and Pensions (DWP) for some years. Accordingly, its eventual arrival was widely anticipated. What are the key measures/provisions in the Bill? The Bill is arranged in five parts. The first part concentrates on defined benefit (DB) schemes and addresses two quite distinct matters: Asset pooling for the Local Government Pension Scheme. Allowing trustees to agree to the return of surplus in a DB scheme to the employer, which, among other things, removes the restrictions under section 251 of the Pensions Act...

On 4 October 2024, the Investment Association (IA) set out proposals addressing costs, tax and regulation, aiming to help make the national pensions system operate more efficiently. Representing UK investors overseeing £2.2trn for pension schemes and £1.1trn via insurers, the association issued its report in reply to a call for evidence from HM Treasury and the Department for Work and Pensions as part of their pensions investment review, covering workplace pensions and the local government pension scheme. In the paper, the trade body argued that folding smaller pension schemes into bigger entities to boost efficiency, broaden investment exposure and bolster governance would be insufficient. It said: 'Explicitly embrace the concept of 'sophisticated scale', with an emphasis on the importance of strong governance, accountability and appropriate investment expertise as the starting point for success, regardless of size or legal delivery structure,' the report noted...

Original news Source: SAB response to Pension Regulator’s consultation on new enforcement policy News summary In its formal reply to TPR’s consultation on a new enforcement strategy, the SAB backed TPR’s aim to bolster governance and compliance across pension schemes. Nonetheless, the SAB warned that any updated TPR enforcement framework must recognise the LGPS’s distinctive structure and public service role. It further urged clearer lines of communication, more substantive feedback on reported breaches, and tighter alignment between enforcement activity and the LGPS’s already high governance standards. What has happened? TPR launched a consultation to reshape its enforcement policy, seeking a more strategic, risk-based and transparent approach across UK pension schemes...

The statutory framework Generally, the statutory regime governing private sector occupational pension schemes under Scots law mirrors that applicable across the rest of the UK. That said, the foundational trust law on which most private sector schemes rest is not the same, as Scotland has its own distinct trust legislation and a separate body of case law. The Scottish court structure operates wholly apart from the English system, and although English decisions on pension matters can be helpful in addressing particular questions, they do not bind the Scottish courts. Variations in several other branches of law can also shape how pensions law is interpreted and how practice is carried out. These divergences may affect both legal analysis and day-to-day administration. Application of legislation, guidance and other policy in Scotland When advising on pension schemes governed by Scots law, it is important to verify that any cited legislation in fact extends to Scotland. A comparable approach is required for guidance and policy: there will be occasions when it...

FORTHCOMING CHANGE 1 : On 1 September 2022, the DLUHC opened a consultation proposing new duties for the LGPS to oversee and disclose climate-related risks, including the carbon emissions tied to their investments. The LGPS is the UK’s largest public sector pension scheme, covering 6.2 million members and holding £342bn in assets worldwide. Under the government’s plans, administering authorities would be required to: Calculate their carbon footprint; Assess how climate change could influence pension-related assets and liabilities; and Report each year on the extent to which assets align with the 2015 Paris Accords, the international climate treaty adopted by much of the world. This seeks to enhance the management of climate-related financial risk and would bring the LGPS into line with requirements already in force for private pension schemes. The proposals are intended to replicate the Task Force for Climate-Related Financial Disclosures (TCFD) measures that already apply to the largest private occupational pension schemes and master trusts. The consultation closed...

FORTHCOMING CHANGE : On 13 October 2025, the Ministry of Housing, Communities and Local Government (MHCLG) opened a consultation on proposed reforms to the Local Government Pension Scheme (LGPS) in England and Wales. A central strand is a substantial reset of Fair Deal protections, bringing the scheme into line with the 2013 Fair Deal guidance and phasing out admission body agreements and the use of ‘broadly comparable’ schemes for future outsourcing, other than in limited, exceptional cases. In their place, a new default ‘deemed employer’ approach would mean staff compulsorily moved under TUPE keep unbroken LGPS membership, with the original Fair Deal employer retaining pension responsibility rather than relying on admission bodies. These safeguards would carry through re-tenders and later transfers, preserving access for ‘protected transferees’ and, at the employer’s option, extending to new starters on the contract. Draft regulations to deliver these Fair Deal measures accompanied the consultation, underlining the government’s plan to reinforce long-term pension security for outsourced local government employees. For further information, see Practice Note:...

This Agreement is dated [ insert date— note that admission agreements may now commence prior to the execution date and, where appropriate, take effect from an earlier date ]. Parties [ insert full name of Administering Authority ] (the ‘Administering Authority’); [ insert full name of Scheme Employer ] (the ‘Scheme Employer’); [ insert full name of Admission Body ], a company incorporated in England (company registration no. [ insert number ]) with its registered office at [ insert registered company address ] (the ‘Admission Body’). Background [ insert full name of Administering Authority ] acts as the Administering Authority of the [ insert full name of pension scheme ] in accordance with the Regulations as in force. The Scheme Employer is a scheme employer within the meaning given by the Regulations. From the Contract Start Date, the Admission Body shall deliver the Services in relation to the performance of a function of the Scheme Employer...

2 Access to Local Government Pension Scheme The parties agree that, in accordance with the Best Value Direction [ and any revised Fair Deal Guidance that may apply ], Relevant Employees shall be permitted to remain members of the LGPS (or, in narrowly defined situations, a Broadly Comparable Pension Scheme) for as long as they continue to be [ wholly or mainly ] engaged in delivering the Services. Relevant Employees may enforce the provisions of this Schedule to the extent that such provisions are reflected within the Best Value Direction. ...

On [ date ], the parties enter into this Agreement, namely: 1 [ ] of [ ] (the ‘ Administering Authority ’); 2 [ ] of [ ] (the ‘ Scheme Employer ’); 3 [ ] of [ ] (the ‘ Admission Body ’); and 4 [ ] of [ ] (the ‘ Guarantor ’). Background (A) Under the Regulations, the Administering Authority is an administering authority. It runs and upholds the Scheme in line with the Regulations and has delegated authority to make determinations under section 25(5) of the Public Service Pensions Act 2013 regarding employees of admission bodies. (B) The Scheme Employer falls within the definition of a Scheme employer for the purposes of the Regulations. (C) The Admission Body is an admission body as described in [ ] of Schedule 2 to the 2013 Regulations and intends to enter into the Admission Agreement. [ It supplies the [ services ] [ assets ] referenced in the Contract and, in carrying out...