A local authority fund representative has criticised the Pensions Regulator’s proposed single code of practice, saying it fails to give clarity or take account of the specific structures of the Local Government Pension Scheme. 

 

The regulator is currently consulting on pulling 10 of its 15 codes of practice into a single code to make its contents more easily accessible, including code 14 on the governance and administration of public service schemes. 

 

However, the code is not meeting with enthusiasm from public service schemes. Jo Quarterman, project and development manager at Norfolk County Council, said that given its scale and responsibility, “the LGPS surely deserves a regulatory framework that helps us" deliver pensions for nearly 6m members. 

 

“Do we have that at the moment? I’m not sure we do. Will the combined code make it better? Hand on heart I don’t think it will,” she said speaking at the Pensions and Lifetime Savings Association’s Local Authority Conference on Wednesday. 

 

 

Among others, the draft code introduces the term ‘governing body’, which it says is “responsible for running a scheme”. For public service schemes, this governing body may be "the scheme manager and the pension board”, while "the governance structure of public service pension schemes will need to take account of the differing responsibilities of the scheme manager, pension board and, where appropriate, pension committee”, it adds. 

 

Quarterman criticised the introduction of the term ‘governing body’, saying the term is overly general and “not what we need now”. Leaving it open to each fund how to interpret the code as suggested by the regulator was not helpful, she argued. “We need codes and guidance that introduce clarity and consistency rather than ambiguity,” she said. “We need a framework that properly understands the LGPS.” 

 

For example, while administering authorities are the ‘scheme managers’ cited in the code, in reality these tend to delegate decisions to the pensions committee, with other responsibilities delegated to pensions officers. Pension boards, which feature prominently in TPR’s code, are on the other hand “not part of day to day running of the fund”, she said. 

 

Quarterman noted that some in the local government sector have requested an LGPS-specific version of the code. The regulator’s view is that governing bodies of LGPS funds should consider their own structure and where responsibilities sit, she said, but added: “We already know where they sit, they just don’t sit comfortably alongside the code.” 

 

 

She also criticised the regulator’s proposals on investment governance and monitoring, saying that “at best we see a bit of scope creep or at worst it brings ambiguity into our world”. 

 

Nick Gannon, policy delivery lead at the regulator, admitted that it was difficult for TPR to regulate this area as investment governance is normally with pension committees, which are made up of elected councillors.  

 

“We can only write the code for entities we can write the code for,” he said, and added that “if decisions are made with those thoughts in mind” it would be an informed decision, implying that committees could hold themselves to the code voluntarily. 

 

But he denied that there was “scope creep”, calling it instead “a refresh” with greater consistency of expectations and more detail. 

 

The consultation on the single code is open until 26 May.