Guidance

Local Government Pension Scheme administering authorities: local government reorganisation

Published 30 July 2026

Applies to England and Wales

This guidance is primarily intended for section 151 officers, officers in Local Government Pension Scheme (LGPS) funds, LGPS senior officers, Local Government Pension Committee members and Local Government Pension Board members.

As part of local government reorganisation, a new administering authority (AA) may need to be designated for the LGPS fund (the fund). This is because the AA, often the county council, may no longer exist.

While this should be a local decision, any such change will require agreement from the Secretary of State to confer AA functions on the new body and statutorily novate the assets and liabilities of the previous AA, and other councils involved in unitarisation, to the new AA.

This guidance sets out:

• considerations when selecting a new AA, including the option of single purpose pension authorities
• how to engage the department when deciding on a new AA 
• timings for any decisions

This guidance does not cover the operational activities and management decisions involved in preparing and implementing reorganisation within a fund.

How to select the new administering authority

Under the most recent rounds of local government reorganisation, one of the new unitary councils was designated as the new AA with responsibility for managing the scheme for all employers in the fund.

When selecting a new AA, fund officers, predecessor councils and new shadow councils must consider:

• if the new AA has the capacity to be responsible for administering the scheme to manage a fund with assets and liabilities which may far exceed the operational budget of the host authority
• whether additional expertise or safeguards might be required, particularly around cyber risk
• the ability of the new AA to meet all the legislative governance requirements and demonstrate effective governance arrangements, including requirements for Independent Governance Reviews
• the ability of the new AA to participate in the governance of its asset pool, including the responsibilities as shareholder where relevant
• access that the AA will have to resources such as IT (in particular cyber security), finance, and HR to support its functions
• any impact on shared services received from or provided to other AAs
• transfer of any contracts, agreements and guarantees to the new AA
• how to prevent any disruption to the service provided to members, including payment of benefits, data transfer of member and employer records, and provide a high quality service in the future
• whether there is potential for merger with adjacent funds, either during or following reorganisation

These considerations are consistent with our Fit for the Future pension reforms, which aim to enhance governance and increase professionalisation, while delivering for members.

There has been interest from some councils in establishing a Single Purpose Pension Authority (SPPA), alongside the new unitary authorities. The department is open to receiving proposals, which will be subject to Secretary of State approval. There can be good strategic and practical reasons for creating an SPPA and these can also be considered in line with Fit for the Future. In considering an SPPA, fund officers and councils should take account of:

• whether the fund operates at sufficient scale (for reference, there are 2 existing SPPAs: South Yorkshire Pension Authority serves around 130,000 members, and London Pensions Fund Authority serves around 100,000 members)
• opportunities for improvements in service delivery, enhanced member experience or efficiencies
• the potential to facilitate future mergers between neighbouring funds, to create larger organisations that can operate at scale. Where proposals include a merger proposal, these must be coherent with current and proposed strategic authorities and both funds must participate in the same asset pool
• governance benefits such as accountability, representation on the Pension Committee, focussed decision making or greater external expertise on Pension Committees or Boards

Local decision making

You will need sufficient time to plan and implement the transition so that the new AA is ready to administer pensions from vesting day. There also needs to be sufficient time for the legislation designating the new AA to be prepared and laid before Parliament.

It is important that decisions about pensions are not left to the last minute and sufficient time is given to understand the implications of different options.

We advise fund officers to provide options to the current AA, based on the new unitary structure. This must also take into account the views of any interested stakeholders – such as any funds which have a shared service arrangement with the AA. Employers should be kept informed of the proposals.

The current AA can then make representations to the department. This will allow the Secretary of State to make a decision in principle, to be agreed by the shadow authorities on their election in May 2027.

Alternatively, the decision can be taken once the new shadow authorities have been elected. This reduces the time available for discussion of the issue, but is in line with previous rounds of reorganisation. We would expect fund officials to have options prepared to present to the shadow authorities.

Submitting a proposal to the department

MHCLG officials will require information to understand the preferred AA, and your reasoning behind it, to put to the Secretary of State for decision. We are not proposing a specific template, but at a minimum would expect to see:

• the lead proposal, and any alternative options considered. We want to see evidence that this is the best option and the data underpinning it – particularly if making the case for a Single Purpose Pension Authority
• views of any connected stakeholders
• costs, benefits and efficiencies of the lead proposal
• operational risks with the transition to a new AA and how these will be mitigated
• proposed governance arrangements, including the LGPS senior officer and how employers, including other local authorities will be represented
• consistency with Fit for the Future reforms and proposals, including governance requirements and pool participation
• how the new AA will handle risks, particularly around data protections and cybersecurity

In making your local decision, and submitting a proposal to the department, you should work with your area lead supporting on local government reorganisation, and with the Local Government Pension Team. The Local Government Pension Team can be contacted on: LGPensions@communities.gov.uk.

Timing

To ensure that decision making and preparation of the legislation can meet the required deadlines, it is important that we receive your proposals in good time.

Any proposals for SPPA will need to be received by 15 February 2027. If ministers are minded to agree, this decision will then be reviewed and ratified by the shadow authorities following their elections in May 2027.

For proposals to move the AA to a unitary authority, there are 2 possible tracks:

• where the AA is able to submit a proposal in advance of the election of shadow authorities, these should be received by 1 March 2027. This will allow a decision to be made in principle by ministers, to be reviewed and ratified by the shadow authorities following their elections in May 2027
• if the proposal cannot be submitted before the election of the shadow authorities, this must be received by 30 September 2027

The Local Government Pension Team will begin a period of regular engagement from summer 2026 to support you in meeting these deadlines.