Statutory guidance

Local Government Pension Scheme: fund governance

Published 29 June 2026

Applies to England and Wales

1. Introduction

1.1. This guidance is statutory guidance issued by the Secretary of State in accordance with the Local Government Pension Scheme (LGPS) (Amendment) (Governance) Regulations 2026. It relates to Section 5 of the Pension Schemes Act 2026.

2. Knowledge and understanding

2.1. Regulation 55A of the LGPS Regulations 2013 sets out that an administering authority must prepare a Training Strategy setting out how the authority will ensure that any persons to whom regulation 55B(1) or (2) (administering authorities: knowledge and understanding requirement for relevant persons) applies will meet the knowledge and understanding requirement in paragraph (3) of that regulation. 

2.2. Regulation 55B(4) states that the degree of knowledge and understanding required is that appropriate for the purposes of enabling that person to properly exercise the functions that have been delegated to them by the administering authority in accordance with guidance issued by the Secretary of State.

2.3. This document constitutes the guidance referred to by regulation 55B(4). 

2.4. There are other legislative requirements relating to knowledge and understanding requirements that administering authorities should also ensure are adhered to:

• Section 248A of the Pensions Act 2004

• Schedule 4 of the Public Service Pensions Act 2013

• fiduciary and public law duties

• MiFID II (Markets in Financial Instruments Directive)

2.5. Other relevant guidance:

• the Pensions Regulator’s General Code 

• Scheme Advisory Board guidance

• Chartered Institute of Public Finance and Accountancy (CIPFA) guidance

Knowledge and understanding requirements  

2.6. Regardless of the range of responsibilities, those exercising a delegated responsibility on behalf of the administering authority must, as a minimum, be conversant with: 

• the rules of the LGPS, and

• any document recording policy about funding, investment, administration, communications, or governance which is for the time being adopted in relation to the scheme

2.7. Such persons must have knowledge and understanding of:

• the law relating to pensions, and

• such other matters as may be prescribed in legislation and guidance

2.8. Being conversant with the rules of the LGPS and any document recording policy about the investment, governance, and administration of the pension fund by the administering authority means having a working knowledge (meaning a sufficient level of familiarity) to enable individuals to whom the requirements apply to carry out their roles properly.

2.9. The further degree of knowledge and understanding required for individuals responsible for the management and oversight of the LGPS is that which is appropriate to enable the individual to properly exercise their specific delegated responsibility on behalf of the administering authority. In practice, this means that the level of relevant knowledge, understanding, skills and competencies required will vary and should be specific to the role and responsibilities and be annually assessed.  

Definition of knowledge and understanding by role 

2.10. This guidance applies to individuals responsible for the management of the LGPS or who have a decision-making, scrutiny, or oversight role. This includes all those listed below (in relation to their roles in the governance and management of the fund): 

• LGPS senior officer of the administering authority

• other officers with delegated responsibilities

• Pension committee (or equivalent) members and co-opted members, including:  

  - administering authority elected members  

  - other local authority elected members

  - employer representatives

  - scheme member representatives

  - substitutes of any of the above

• independent person

• any other individuals involved in management or a decision-making, scrutiny or oversight role relating to the fund

Pension Committee members    

2.11. The administering authority has ultimate responsibility for managing the LGPS, including its investment strategy, governance and administration. 

2.12. Each administering authority is required to determine its own governance arrangements, and the delegation of those responsibilities will be included in the authority’s constitution (or equivalent). In addition, each administering authority must set those arrangements out in its Governance Strategy. This statement should set out if the administering authority delegates its functions, or part of its function, to a committee or sub‑committee or to an officer of the authority. 

2.13. All members of a pension committee are expected to have the required knowledge and understanding relating to their LGPS duties and responsibilities. It is appropriate to consider the knowledge and understanding of a committee as an individual requirement. Administering authorities should ensure that an individual’s degree of knowledge and understanding is appropriate for the purposes of enabling the individual, and therefore the committee as a whole, to properly exercise their delegated responsibility on behalf of the administering authority.

2.14. A committee may have other local authority elected members, representatives of other employers and scheme member representatives among its membership, all of whom may have different voting rights. Irrespective of the position on voting, knowledge and understanding requirements apply equally to all committee members.

2.15. Administering authorities should also consider the risk of having substitute members (if relevant) who may not have the same level of knowledge and access to training as the main committee members. Substitute members should have sufficient knowledge and understanding to fulfil the role effectively and be provided with access to training as required. 

2.16. Administering authorities must be able to demonstrate and explain that the individual knowledge and understanding of each pension committee member, together with the advice available to the committee, enable committee members to properly exercise their delegated functions.     

2.17. The administering authority must maintain a Training Strategy for the ongoing maintenance and development of the committee’s knowledge. It must set out how knowledge will be obtained and maintained, including how they will assess and address skills gaps and seek to increase knowledge.   

2.18. Given the high bar expected of committee members in relation to their knowledge and understanding, it is important that they understand what is expected of them. This includes: 

• committing to undertake the role for a term of office and having the capacity to attend meetings

• understanding that roles on the committee are in a non-political capacity 

• attending and participating constructively in meetings

• undertaking training and development appropriate to their role and individual needs

• approaching matters with an open and independent mind, avoiding any pre-determination bias

• having the confidence to challenge, influence and engage

• operating within the terms of reference of the committee and the administering authority’s code of conduct

LGPS senior officer 

2.19. Each administering authority must appoint its own LGPS senior officer who has overall responsibility for all pension functions of the authority. 

2.20. Each administering authority must ensure those in this role have appropriate knowledge and understanding to fulfil this important role. This role must have authority within the organisation and should also be responsible for ensuring that fund policies are implemented, including the delivery of the fund’s Training Strategy.

2.21. As with the other roles, the degree of knowledge and understanding required is that which is appropriate for the purposes of enabling the individual to properly exercise their delegated responsibility on behalf of the administering authority. The level of risk and responsibility involved in the day-to-day operations of an LGPS fund cannot be underestimated, and it will therefore fall on these senior officers to ensure that robust controls are in place. In addition, they will be the key officers providing advice, guidance and assurance to the committee and Local Pension Board.

Pension Board Members 

2.22. Local Pension Board members are required by Section 248A of the Pensions Act 2004 to be conversant with the rules of the scheme and any policy document in force in relation to its administration, and to have knowledge and understanding of the law relating to pensions and any other such matters as may be prescribed. Pension Board Members must have a sufficient level of understanding to enable them to properly exercise their functions as members of the Board.

2.23. Under Regulation 109 of the LGPS Regulations 2013, administering authorities must have regard to guidance issued by the Secretary of State in relation to local pension boards. An administering authority should set out in its Training Strategy how it will ensure that members of the Local Pensions Board have sufficient knowledge and understanding to assist the administering authority to secure compliance with the Regulations and other legislation relating to the governance and administration of the LGPS (which should be interpreted as including the Regulations and other legislation relating to investment and funding matters insofar as they relate to the role of the Pension Board) and/or any failure to meet the standards and expectations set out The Pension Regulator’s General Code.

2.24. The administering authority’s training strategy should also set out how it will ensure that members of a Local Pension Board have a breadth of knowledge and understanding that is sufficient to allow them to understand fully any professional advice the Local Pension Board is given or shared. The training strategy should also set out how it will ensure members are able to challenge any information or advice they are given and understand how that information or advice impacts on any decision relating to the Local Pension Board’s duty to assist the administering authority.

Knowledge and understanding principles

2.25. Administering authorities responsible for the administration of the LGPS will recognise that effective management, strategic decisions, governance, and other aspects of the delivery of the LGPS can only be achieved where those involved have the requisite knowledge and skills to properly discharge the duties and responsibilities allocated to them.

2.26. Administering authorities must have the necessary resources in place to ensure all staff, members and other persons responsible for the management, decision making, governance and other aspects of the delivery of the LGPS acquire and retain the necessary knowledge and understanding.

2.27. How this is delivered must be set out in the Training Strategy. This strategy must cover the fund’s objectives, delivery and reporting arrangements on how it plans to support the relevant individuals to acquire and retain LGPS knowledge and understanding appropriate for the purposes of enabling those individuals to properly exercise their functions that have been delegated by the administering authority. This should cover the training needs of the pensions committee, the local pension board, relevant officers, and the key training strategy principles for officers of the fund.

Key areas of knowledge and understanding

2.28. The LGPS is a complex, multi-faceted scheme that requires knowledge and understanding across several disciplines. For the purposes of this guidance, and to help administering authorities deliver a structured training program, this guidance sets out 9 core technical areas where appropriate knowledge and understanding should be achieved and maintained on an individual basis:

• relevant pensions legislation and guidance

• pensions governance

• funding strategy and actuarial methods

• pensions administration and communications

• pensions financial strategy, management, accounting, reporting and audit standards

• investment objectives, strategic asset allocation, pooling, and pooling performance management

• risk management 

• pension services procurement, contract management, and relationship management.

• key skills and behaviours

2.29. The above list is not exhaustive and administering authorities should also review The Pension Regulator’s General Code to understand regulatory expectation.

2.30. The priority and timescales of acquiring the necessary level of knowledge in each area must be assessed based on an individual’s knowledge requirements and balancing these with the fund’s overall work plan. However this should be in accordance with paragraphs 2.32 and 2.33 below, as well as relevant CIPFA guidance.     

2.31. The Training Strategy should outline any other areas or competencies that may be adopted by an administering authority.  

Monitoring and reporting   

2.32. As part of the fund’s governance processes administering authorities must be able to demonstrate that the governing bodies have the knowledge and understanding for governing the scheme. This means that pension committee and board reporting must demonstrate how knowledge and understanding requirements have been considered and applied when decisions are being discussed or taken during meetings. This is particularly important when key strategic decisions have to be made.

2.33. At a minimum, administering authorities should carry out the following to monitor and report knowledge and understanding:

• keep a record of the training each member of the committee and board has received each year and include this in the annual report and accounts each year

• ensure Committee and Board papers provide a link to the training members have received on particular topics

• take action where poor attendance of training is identified 

• undertake a training needs assessment of existing knowledge and understanding to assist with prioritisation of training delivery and prepare tailored training plans for roles and in line with the AA’s workplan items  

• communicate regularly with pension committee and board members encouraging them to highlight training needs on an ongoing basis

• report training attended (or not) in the fund’s annual report and accounts each year

• ensure the Committee Terms of Reference covers non-compliance with knowledge and understanding requirements

• inform Committee and Board members that they must take responsibility for keeping an accurate record of their own training. This should be kept up to date and shared with the administering authority annually - this could also cover keeping records of any alternative or further learning activity (for example, reading, attending conferences, sessions with the scheme advisors)

• ensure the training needs assessment and all records monitoring knowledge and understanding are available to persons carrying out an independent governance review

Key events and timescales

2.34. Incoming members of the Pension Committee or board should be aware that their responsibilities and duties begin from the date they take up their post and therefore funds should attempt to ensure that comprehensive inductions are completed with individuals new to their role within 3 months of joining or before their first meeting, whichever is sooner. Where it is not possible due to a meeting date within this period, it is important induction training is prioritised based on the key decisions being considered at the first meeting. The requirements and training expectations should be clearly outlined to all parties involved in the pre-appointment information supplied to potential committee and board members.  

2.35. Ensuring the fund’s objectives in the Training Strategy are being met is important, and administering authorities must assess annually whether committee members, local pension board members and senior officers have the required knowledge and understanding required to properly undertake their role in line with the planned activities of the fund’s workplan. If knowledge and understand gaps are identified, how these should be addressed should be covered in the fund’s Training Strategy and ongoing training plan.  

Training resources 

2.36. It is the LGPS senior officer’s responsibility to ensure that the administering authority is adequately resourced to ensure legal requirements and the objectives in the Training Strategy can be met. The Training Strategy needs to set out the commitment to access expert training resources, reimbursement for time spent attending training sessions and other relevant learning and development events. Organising joint training activities for both pension committee and board members is encouraged.

3. LGPS senior officer

3.1. Regulation 53A of the LGPS Regulations 2013 requires every administering authority to have an LGPS senior officer. The LGPS senior officer is responsible for ensuring the administering authority is appropriately managed and resourced in respect of all matters of the Scheme. This includes administration, investment and governance. This guidance constitutes the guidance referred to in regulation 53A.

What the role covers

3.2. The LGPS senior officer is responsible for all aspects of managing the LGPS within the administering authority. They should be a visible, accountable leader within the administering authority. Their responsibilities include, but are not limited to:

• responsibility for the day-to-day management of the administering authority across all pension functions, including (but not limited to) investments, administration, funding, and governance and communications

• ensuring compliance with scheme regulations, statutory guidance, other relevant legislation and The Pension Regulator’s General Code

• responsibility for key performance indicators (KPIs) and ensuring high-quality service to scheme members 

• ensuring that draft strategies such as the Investment Strategy Statement, Funding Strategy Statement and Administration Strategy, are prepared in accordance with legislation and guidance (the final strategy is a delegated responsibility of the pension committee or officer)

• responsibility for implementing strategies approved by the pension committee (with the exception of the Investment Strategy Statement, which is implemented by the relevant asset pool company)

• responsibility for the administration of the scheme

• responsibility for meeting expectations for timely and accurate pension payments

• responsibility for effective contract management, managing suppliers and holding them to account for performance

• responsibility for robust monitoring and review of employer risk, participation in the fund and importance of clear, timely communications with employers

• ensuring that LGPS functions are well resourced and structured 

• responsibility for the LGPS workforce and safeguarding the fund from being impacted by policies implemented by the AA 

• ensuring that LGPS functions deliver good value for money

• ensuring that the decision-making body – be it a pension committee or delegated to an officer - has access to adequate professional advice on all areas, including actuarial, governance, legal and procurement advice

• ensuring that the local pension board is adequately resourced to carry out its role effectively as assisting the scheme manager

• ensuring a training needs analysis is undertaken by those covered by the Training Strategy including committee members, and the recommendations implemented

• identifying and managing risks to the administering authority with a strong culture of risk management

• supporting the effective governance of the administering authority and appropriate implementation of the governance strategy in accordance with guidance

• ensuring that the administering authority carries out Independent Governance Reviews as required by regulation 116A of the LGPS Regulations 2013 and develops an action plan in response to any recommendations or findings

• representing the interests of the LGPS fund within the local authority’s senior leadership team; working with senior stakeholders and ensuring that plans, policies, and resource allocation by the local authority’s senior leadership team take into account the requirements and duties associated with the LGPS fund

• ensuring that the administering authority participates appropriately in the governance structures of the investment pool as shareholder or client representative, depending on the governance set up of the pool

• monitoring the pool’s performance in implementing of the investment strategy and whether the collective pool oversight process is meeting the requirements of the administering authority

3.3. The LGPS senior officer has a responsibility to ensure that LGPS functions are well resourced and structured. The LGPS senior officer is responsible for drawing up the fund’s budget and business plan and then agreeing it with the Pension Committee. Both the Pension Committee (or equivalent) and LGPS senior officer must be satisfied with the resource and budget allocated to deliver the LGPS service over the time period set out in the business plan. Pension fund budget-setting should be entirely separate from that of the local authority and should not be subject to any resource or budget restrictions that may apply across other functions of the local authority, as all administering authority costs are met by the fund itself.

3.4. The LGPS senior officer should have a direct relationship with the independent person and the Pension Board chair, in order to draw on their expertise and consider any recommendations or concerns they may raise.  

3.5. Where the administering authority chooses to delegate pensions functions to an officer, it should be to the LGPS senior officer. Senior officers should be involved in the development and approval of all fund strategies including the Funding Strategy Statement and Investment Strategy Statement, although the final approval of such strategies is still for the Pension Committee. 

Interaction with the S151 Officer

3.6. The Section 151 officer will remain ultimately responsible for the proper administration of the local authority’s financial affairs. As regulation 53A sets out, the LGPS senior officer will have senior responsibility across all pension functions to ensure the fund is appropriately managed and resourced across administration, investment and governance matters.

3.7. The LGPS senior officer is a statutory role that will have a demanding workload and significant responsibility. The role must not be combined or attached to other significant senior roles in the administering authority. Specifically, the LGPS senior officer must not be the same person as the Section 151 officer at the administering authority. The LGPS senior officer may report to the Section 151 officer, depending on local reporting structures, but this is not a requirement. 

3.8. The government recognises that, with a separate LGPS senior officer and Section 151 officer, there will be areas which fall into the remits of both roles. This is already the case in administering authorities where roles similar to that of the LGPS senior officer already exist. It is important that administering authorities set clear and robust boundaries and expectations between the 2 roles, particularly where the LGPS senior officer reports to the Section 151 officer in the authority’s reporting structure.

3.9. Section 98 of the English Devolution and Community Empowerment Act 2026 made an amendment to the Local Audit and Accountability Act 2014 which will ultimately allow pension fund accounts to be separated from local authority accounts in England (as is already the case in Wales). Government intends to make secondary legislation, and issue guidance, to implement this change in due course. Once this change has been made, both the Section 151 and the LGPS senior officer should agree pension fund accounts. However, the signing-off of final accounts will still fall to qualified persons only. Having an accountancy qualification is therefore not a requirement for the role of LGPS senior officer.

Who can perform the role

3.10. Whilst the government is clear that the role of the LGPS senior officer cannot be combined with that of the Section 151 officer, it is acceptable for the LGPS senior officer to have other minor roles and responsibilities. When appointing the LGPS senior officer, administering authorities should carefully consider what other roles the person may perform, in order to ensure that the officer can dedicate the overwhelming majority of their time and capacity to their LGPS responsibilities as well as ensuring this is done with the appropriate degree of independence from other local authority responsibilities. In administering authorities that are local authorities, the LGPS senior officer must not be head of paid service.

3.11. Regulation 53A of the LGPS Regulations 2013 mandates that there is only one officer, meaning the LGPS senior officer role must not be split between different functions, such as having one named officer for administration and another for investments. All responsibility for LGPS functions should sit within the LGPS senior officer’s reporting structure. The role may however be performed as a job-share, as long as the job-share does not result in splitting LGPS functions. 

3.12. The LGPS senior officer is a senior role that must have authority within the organisation. The government recognises that management structures differ but expects the role to be undertaken by a director, assistant director or head of service, or equivalent leadership at a single purpose pensions authority, i.e. at a grade that will be part of the administering authority’s senior leadership team and operate effectively in that environment.

3.13. The government has not prescribed any specific criteria for the professional competencies required of LGPS senior officers. However, the demands and seniority of the role will naturally require certain capabilities, such as the ability to operate at a senior level and engage with senior stakeholders, and possess appropriate knowledge of the Scheme. It is for each administering authority to satisfy itself that the LGPS senior officer has the knowledge and skills to properly deliver the statutory role set out by regulation 53A.  In some cases, an administering authority may have officers who already fulfil a similar role, and these officers may be appointed as the LGPS senior officer, provided that they meet these requirements.

3.14. There is no requirement for a professional qualification, although AAs  may consider if it is necessary. It is expected that LGPS senior officers will keep their skills relevant to the role up to date, and seek out professional development where appropriate. It is also expected that senior LGPS officers will participate in professional networks of other such officers.

3.15. Where administering authorities operate shared services with other administering authorities, multiple administering authorities may appoint a joint LGPS senior officer to serve both administering authorities.

Appointing an LGPS senior officer

3.16. The role is not a political appointment and should be made by the Head of Paid Service (or in Welsh administering authorities, the Chief Executive) in the same way as any other senior appointment would be made, such as a Head of Service. It is a local decision whether the pension committee should have the right to comment on the proposed appointment or not, but the final decision lies with the Head of Paid Service (or in Welsh administering authorities, the Chief Executive). The role is likely to be  a politically restricted post, within the meaning of Part I of the Local Government and Housing Act 1989, depending on how each administering authority structures the position.

3.17. At single purpose pension authorities, the LGPS senior officer must be the Head of Paid Service. In these organisations, the LGPS senior officer should be appointed in the same way as any other senior appointment would be made.

3.18. It is important that LGPS senior officers are appointed in a timely way, although the government recognises that the recruitment process for a senior role such as this can take some time. The role must be appointed to within 6 months of Regulation 53A coming into force. 

3.19. As part of the administering authority’s risk management, authorities should consider key personnel risk, and undertake robust succession planning. The government expects that short absences will be manageable in the normal way, but the administering authority should consider contingencies for longer absences, such as appointing a deputy or an acting officer. Where someone vacates the role, the same deadline of appointing a new officer within 6 months applies.  

4. Independent person

4.1. Regulation 53A of the LGPS Regulations 2013 requires every administering authority to appoint an independent person to support the LGPS senior officer and the pensions committee or equivalent officer(s) that the administering authority delegates its pension functions to. Regulation 53A also requires the appointment to be in accordance with guidance issued by the Secretary of State.

4.2. At single purpose pensions authorities, the independent person is permitted to serve as a voting or non-voting member of the committee in addition to supporting the LGPS senior officer. 

What the role covers

4.3. The independent person’s role is to support the LGPS senior officer and support and contribute to pension committees - where these exist - or support delegated officers, where not.

4.4. This guidance covers both scenarios but refers to committees as most administering authorities have established pension committees.

4.5. The independent person should support pension committees by providing independent and professional expertise including to support committees to scrutinise and challenge the advice they receive. The role is similar to that of a Non-Executive Director or Professional Trustee. Their responsibilities cover all functions of the pension committee or its equivalent, including decisions on investment strategy, governance, administration and the role of the administering authority as a shareholder or client of its asset pool company. 

4.6. The independent person’s duties should include, among other things:  

• to support and contribute to the development of all strategies for which the pension committee is responsible

• to scrutinise any advice given to the committee, whether from the pool or any other organisation or individual

• to help monitor and assess performance against targets set in LGPS strategies, including administrative performance and the pool’s implementation of the investment strategy, and help monitor whether the collective pool oversight process is meeting the requirements of the administering authority

• to support consideration of the committee’s governance arrangements, including any action plans arising from Independent Governance Reviews

• to contribute in any other way appropriate to the authority’s LGPS functions

4.7. The independent person should provide additional scrutiny and challenge, by virtue of their being fully independent from the administering authority. 

Who can perform the role

4.8. The government expects the independent person to hold one or more of the following qualifications or experience: 

• a qualification from Pensions Management Institute (PMI) – the award in pension trusteeship, diploma in professional trusteeship, certificate in professional trusteeship, accreditation for professional trustees

• member of, and accredited by, the Association of Professional Pension Trustees (APPT)

• significant experience of pensions

4.9. While it is preferable for such experience to be of the LGPS, persons such as experienced professional trustees of other pension schemes may perform the role, as long as they have significant relevant experience. As the role is intended to cover all LGPS functions, it would not be appropriate for existing investment advisers to fulfil the role, unless the administering authority is satisfied that the person has significant experience relevant to governance and administration. 

4.10. Independent persons are not required to be persons authorised by the FCA to provide advice or to hold liabilities insurance.

4.11. To ensure the independence, both actual and perceived, of the independent person, they must not be employed by any company that currently provides other paid pensions advice to the administering authority (notwithstanding the pensions advice relating to the support staff or the Pension Board Chair as permitted below in paragraph 4.14 below) or that conducts the administering authority’s Independent Governance Review or actuarial valuation, or by any company that has provided such services within the past 2 valuation cycles. Providing specialist professional advice relating to services such as cyber security does not preclude an individual firm from providing the Independent Person.

4.12. If an individual is in post as an independent person, and circumstances change such that a company they are employed by now provides other paid pensions advice, or conducts the authority’s independent governance review or actuarial valuation, then the individual should resign from their role as the independent person if they intend to remain employed by that company. The independent person role should not be filled by a firm which is providing any other paid pensions advice to the administering authority, nor by one that is conducting the administering authority’s Independent Governance Review or actuarial valuation, or that has done so within the previous valuation cycle.  This should be set out in an administering authority’s conflicts of interest policy.

4.13. An individual fulfilling the role of independent person for one administering authority may do the same for another administering authority, but they and the authorities will need to carefully consider their other roles and ensure that no conflict of interest arises and that the independent person can devote sufficient time to each role.

4.14. An individual serving as the independent chair of a Local Pension Board may also serve as the independent person at any administering authority, including the administering authority where they serve as independent chair, provided that the administering authority or authorities that interact with the individual are confident that the individual can devote sufficient time to the role, and can act with sufficient independence and in accordance with conflicts of interest policies and the knowledge and skills requirements outlined in paragraphs 4.7 and 4.8. 

4.15. An LGPS senior officer at one administering authority is permitted to fulfil the role of independent person at another administering authority if the administering authority appointing the individual is confident that they can devote sufficient time to the role, and can act with sufficient independence and in accordance with conflicts of interest policies.

4.16. Some administering authorities may already have someone serving on their pension committee who meets the requirements above. If the administering authority is confident that the existing appointment already meets the requirements of regulation 53A and of this guidance, it is not required to make an additional appointment, but the authority should formally appoint that person as the independent person. 

Appointments and removals

4.17. The independent person role is required to be one person, and the role must not be split according to different functions of the role. Administering authorities may appoint an individual to perform the role or may procure a firm (such as a professional trustee firm) to provide an independent person – it is a local decision. If the independent person is provided via a firm through a procurement process, that individual may be supported by other staff at the firm, but there should be one individual named and acting as the independent person.

4.18. Independent persons should provide their services under contract to the authority. The appointment must be made within 6 months of regulation 53A coming into force.

4.19. Selection or procurement of candidates is expected to be delegated in most circumstances, either to officers (including to the LGPS senior officer), to an appointments committee, or to the relevant committee for fund appointments. Where selection of candidates is delegated to officers, the LGPS senior officer should make the final decision on appointment. In some circumstances, the LGPS senior officer may wish to consult with The Head of Paid Service (or in Welsh administering authorities, the Chief Executive).

4.20. It is for each administering authority to decide adequate remuneration, appointment or procurement arrangements for the role. All remuneration or fees should be clearly set out as part of the contractual arrangement.  

4.21. To safeguard independence, administering authorities should act in accordance with the UK Corporate Governance Code. This provides that someone supporting the committee as an independent person for longer than 9 years is likely to impair, or appear to impair, their independence. Pension committees should regularly review the contribution of the independent person.

4.22. Where a pension committee or LGPS senior officer wishes to remove an independent person, for example if it loses confidence in the appointee or wishes to terminate a procured contract, it must follow the contractual arrangement.  Administering authorities should consider including provisions such as minimum attendance requirements and break clauses in contracts when making appointments.  

4.23. When the independent person role falls vacant, a new independent person should be appointed within 6 months. 

5. Independent Governance Reviews

5.1. This guidance supports LGPS administering authorities in preparing, commissioning, and publishing Independent Governance Reviews (IGRs). Regulation 116A of the LGPS Regulations 2013, made under the powers in Section 5 of the Pension Schemes Act 2026, sets out requirements relating to IGRs. The IGR is therefore a statutory requirement, as is compliance with associated statutory guidance. This document constitutes the guidance referred to by Regulation 116A.

5.2. Whilst for most administering authorities these requirements will refer to the pension committee, some administering authorities delegate pension functions under the LGPS Regulations 2013 to an officer. Regulation 116A also covers this scenario. If functions are delegated to an officer, the officer must adhere to this guidance.  

Purpose and timing of an Independent Governance Review 

5.3. The IGR will ensure administering authorities review their governance processes and compliance with legislation supported by independent scrutiny, to provide assurance to members and employers.

5.4. Regulation 116A sets out that there are 2 routes towards meeting the requirement for an IGR: a periodic IGR as required by regulations 116A(4) and (6); and an ad-hoc governance review as directed by the Secretary of State under Regulation 116A(2). 

Periodic reviews

5.5. Ad-hoc reviews are intended to be rare, meaning most administering authorities will be required by legislation to conduct their IGR as a periodic review. Administering authorities have flexibility to decide when a periodic governance review will take place to completion (including the sending of a copy to the Secretary of State), so that it can be arranged around other demands on the administering authority’s collective time. This flexibility is expressed through regulation 116A(4), which allows the administering authority to carry out the IGR at any time as long as it is within the period spanning 31st March 2025 and 31st March 2028 valuation dates. This flexibility continues into future valuation periods through Regulation 116A(6).

5.6. Regulation 116A(7) provides that the date for required completion of a further IGR is the end of the valuation period following the valuation period in which the most recent review was carried out under. The IGR should cover the date between the previous review and the new IGR. The flexibility means that the gap between periodic IGRs does not have to be 3 years. Administering authorities should consider locally when a periodic IGR would be most beneficial. 

5.7. Regulation 116A(10) sets out that the person completing an IGR must prepare a report on the review and send the report both to the administering authority and to the Secretary of State. The report should be sent as soon as is practicable and no later than the final date by which the IGR must be completed.

5.8. Regulation 116A(11) sets out that the administering authority must publish the report as soon as practicable after receiving a copy. While administering authorities will want to discuss findings and develop an action plan to address any recommendations, publication should not be unduly delayed. The government expects the administering authority to publish the report and action plan without delay once the committee has agreed the action plan.

Ad hoc reviews

5.9. Administering authorities directed by the Secretary of State to carry out an ad-hoc IGR do not have flexibility to decide when an IGR will take place within the valuation period. The government expects an IGR to be commissioned within 3 months of the direction being given, and for the fieldwork of the review to start within 6 months of the direction being given. Where an ad-hoc review is directed, the Secretary of State will not direct who the administering authority should commission to conduct the review: that remains the responsibility of the administering authority.

5.10. The Secretary of State will consider appropriate factors when deciding if a direction is necessary, such as known governance issues at the local authority,  flagged for concern by the Government Actuary at the Section 13 Review of Actuarial Valuations, or funds that have refused to comply with new statutory requirements. This is a non-exhaustive list of potential factors, and no single factor is guaranteed to trigger a decision to direct an ad-hoc IGR. Ad-hoc IGRs are intended to be rarely directed and the decision to do so will not be taken lightly.

5.11. If an ad hoc IGR is completed by an administering authority, the administering authority does not have to undertake a further periodic review until the next valuation period, but could be directed for another ad hoc IGR within the same valuation period.

Who can conduct an IGR?

5.12. Regulation 116A(13) says that the person carrying out an IGR must be independent of the administering authority and the Secretary of State. The government defines ‘independent of the administering authority’ to be a company or person who is not otherwise engaged with the administering authority in any capacity relating to the pension function at the time of the review being undertaken, and was not engaged in any capacity relating to the pension function during the period of time covered by the review. Independence requires that the individual undertaking the review is not employed by, or acting on behalf of, a specific legal entity that has delivered services to the administering authority in any capacity relating to the pension function.  This means that the IGR assessor must not be the same person or legal entity who is conducting or has conducted the actuarial valuation, nor any other ongoing paid advice relating to the management of the pension fund, at the time of being commissioned to undertake an IGR, or during the period of time that is being assessed in that IGR. The existence of a wider corporate group beyond the legal entity does not, in isolation, compromise independence where the entity employing the reviewer has not been involved in those activities. A company or person who was previously engaged by the administering authority to provide governance consultancy may conduct an IGR, if they are not contracted by the administering authority on a basis which remains ongoing at the time of procurement, in any capacity relating to the pension function.

5.13. An IGR reviewer may have been contracted by the administering authority in a non-pensions related function, or for pensions related functions in the valuation period prior to the time covered in the review. In some cases, a company or person may be a distinct legal entity but may be a subsidiary of a larger corporation which has been contracted by an administering authority for pensions related functions at the time of or immediately preceding an IGR review. In any of these cases, it is for the senior officer to consider potential conflicts of interest and whether they can be successfully mitigated such as not to call into question the provider’s independence or judgement. This assessment should be documented and be made publicly available.

5.14. It is also important that the assessor is suitably qualified or experienced to conduct such a review. It is a local decision for the administering authority as to how the term “sufficient knowledge and understanding of the rules of the Scheme to enable them to properly conduct the review” in regulation 16A(13)(b) is interpreted. The government expects administering authorities to consider the Actuarial, Benefits and Governance Consultancy Framework, as set up by National LGPS Frameworks, or any future iteration of the Framework. Lots 3 and 5 of the Framework are expected to be most relevant for IGRs, but administering authorities can choose assessors not on this Framework.  

Key criteria to be assessed in an IGR report 

5.15. Through this guidance, the government is setting a minimum standard of areas that must be considered in an IGR. The minimum standard is not an exhaustive list of areas, and the administering authority may agree with its assessor to cover any other area that it considers appropriate. It is for administering authorities and assessors to decide together how to consider each area, and the government is not mandating set questions or a template for how IGRs should look. 

5.16. Administering authorities should provide appropriate evidence or access for the assessor to consider the minimum standard of areas set out. Assessors should not simply conduct a desk-based review, but also seek evidence of how policies and procedures are implemented and monitored in practice, including by engaging with key individuals in the administering authority.

5.17. The IGR minimum standard is an assessment of the following areas:

• business planning and performance delivery

• effective systems of governance and internal controls

  - Pensions Committee, LGPS senior officer, and leadership

  - risk management

  - communications with members and employers

5.18. An IGR also assesses whether an administering authority has policies required by all relevant legislation, regulations, and statutory guidance, including on:

• governance strategy, structures, and policies

• training strategy  

• conflict of Interest policy

• administration strategy

• Investment Strategy Statement

• communications strategy

• Funding Strategy Statement

• Annual Reports

• procedure for breaches

• pooling requirements  

Business planning and performance 

5.19. The assessor should review whether the administering authority has a business plan approved by the Committee (or other body with delegated responsibility) and LGPS senior officer, with associated budget, setting out required activities in the forthcoming period.

5.20. Those activities should be driven by the administering authority’s strategies and policies and will include activities driven by changes in overriding legislation. 

5.21. Those responsible for governing the administering authority should be provided with appropriate performance indicators and information. 

5.22. Indicators should:

• demonstrate whether the administering authority’s aims are being achieved

• cover the full range of key areas (for example, investment strategy, administration, funding, governance, and communications)

• demonstrate whether the administering authority’s business plan is being achieved

• be updated in accordance with appropriate timescales

• be presented in a manner that is easy to follow and understandable to those governing the administering authority

• assist in identifying changes needed to the administering authority’s business plan, strategies, polices and aims

Effective systems of governance and internal controls

5.23. The assessor should review whether the administering authority as scheme manager meets its responsibilities according to all relevant legislation, regulations, and guidance. Compliance is a key test of whether effective governance is in place. 

5.24. The Pensions Regulator’s General Code, which has been adapted in this guidance, sets out the expectations for scheme managers to maintain effective systems of governance. Beyond statutory requirements, IGR reviewers should consider the administering authority’s approach to:

• the areas in the Code that relate to legal requirements for LGPS scheme managers, where The Pensions Regulator may consider in line with its usual approach whether to intervene if non-compliance is found

• the areas in the Code – set out in this guidance – that are good practice, to consider whether the expectations should be adhered to or an alternative and justifiable approach should be taken

• the arrangements and procedures to be followed in the administration and management of the scheme

• the systems and arrangements for monitoring that administration and management, and

• arrangements and procedures to be followed for the safe custody and security of the assets of the scheme

Pensions Committee, senior officer, and leadership 

5.25. When assessing how the pension function is managed and the oversight of the Pensions Committee, IGR assessors should consider expected behaviours, the standards for leadership, and assess whether individuals on Committee or in positions of leadership: 

• act honestly and with integrity, competence, and capability

• act with financial probity, including in matters outside their role

• act in the interest of scheme members and beneficiaries

• are open and honest in their dealings with the Pensions Regulator, and MHCLG

• have or are able to acquire the appropriate levels of knowledge and understanding (see Training section)

• identify and, where relevant, challenge others on any potential or actual failure to comply with the scheme rules, regulations, and legislation. All parties involved with the governance and administration of public service pension schemes must report material breaches of the law to the Pensions Regulator.

5.26. Those acting as advisors, independent persons, officers or Committee members should comply with professional standards and guidance.

5.27. It is up to individual authorities and their IGR assessors to determine which roles are considered positions of leadership, based on local structures. 

Meetings and Decision Making   

5.28. The assessor should review whether the administering authority adheres to its policies as set out in their Governance Strategy with regards to meetings and decision making and may cover the following guidelines.

5.29. Assessors should review inclusion of the following in administering authorities’ written meeting records:

• the date, time, and place of the meeting

• the names of all in attendance, including professional advisers or any other person present

• the names of those invited to the meeting but who did not attend

• any decisions made at the meeting, including the names of those who took part in them

• any significant decisions made outside a meeting since the previous meeting, or taken by a committee/sub-committee, including the time, place, and date of the decision, and the names of the members of the governing body who participated in the decision

5.30. Assessors should review that when facilitating decision-making at a Committee level, the administering authority:

• understand and adhere to any prescribed governance processes in the LGPS regulations and guidance

• set the frequency of meetings for the Committee and Local Pension Board

• set out the basis of attendance (for example, in person or online) and the circumstances where this might change

• establish the circumstances, including legislative restrictions, where and how extraordinary meetings may be called

• consider the complexity and urgency of any issues affecting the administering authority to determine the length of the meeting

• ensure that postponed meetings are rescheduled

• set expectations for Committee and Local Pension Board members to prepare for meetings, and actions needed in between them

• agree who has responsibility for setting the agenda and who else is consulted in its development

• agree standing agenda items, for example, risk register and conflicts of interest items, and administration performance report

• establish how many members of the Committee need to attend for any meeting to be considered quorate

Assessors should review that when facilitating decision-making at a Committee level, the administering authority:

• ensures that decisions are made according to LGPS regulations and guidance, and any sub-committees’ terms of reference

• keeps records about any decisions taken by members of the Committee, including related advice or information received, and any conflicts of interest declared

• establishes appropriate retention periods for records of decisions made

• considers publishing information about Committee and Local Pension Board activity, for example, through regular member communications, including information that has been requested by members, to encourage scheme member engagement and promote a culture of transparency

Risk management

5.31. The assessor should review whether the administering authorities have a risk management internal controls proportionate to the size, nature, scale, and complexity of the activities of the administering authority and be considerate of: investment risk, funding risk, employer risk, resource and skill risk, administrative risk, regulatory and compliance risk, reputational risk, cybersecurity risk, and any other relevant risks.

5.32. The risk management internal controls should be structured in such a way as to facilitate the functioning of a risk management system, for which the administering authority should adopt the strategies, processes, and reporting procedures necessary to:

• identify, evaluate, and record risks

• monitor and manage risks

• regularly review the key risks, at an individual and aggregated level, to which the scheme is or could be exposed, and the interdependencies of such risks

• report to the Committee in a timely manner on the risks identified in relation to the expectations set out above in this paragraph

5.33. The policies regarding the operation of the risk management internal controls should: 

• only take effect after they have been approved by the Committee

•  be reviewed at least once every 3 years

Communications with members

5.34. The assessor should review whether the administering authority adheres to the Local Government Pension Scheme Regulations 2013 and the Public Sector Bodies Accessibility Regulations 2018 as a minimum when preparing communications to members, and also consider: 

• ensuring that all communications sent to members are timely, accurate, clear, concise, relevant and in plain English

• how it promotes understanding of pension rights and responsibilities 

• regularly reviewing member communications, encouraging and taking account of member feedback, as well as any changes to scheme design and developments in law and this guidance 

• when deciding on the format of communications and information to be published, consider any technology that may be available to them and appropriate for their members

• using various communication methods, including accessible online content, audio, Braille, large font, and languages other than English

• consider what additional information or explanation members may need to help them make informed decisions about their benefits and encourage engagement with the scheme

Communications with employers

5.35. The assessor should review whether the administering authority adheres to regulation 61 of the LGPS Regulations 2013 as a minimum and also:

• provide clear, timely and accurate information

• support informed decision makings, encourage engagement and feedback to improve services

Contract management

5.36. The assessor should review whether when the contracting service providers, administering authorities consider the interests of the scheme member when contracting service providers and:

• understand the impact of the terms and conditions of contracts, including any fees or penalties, and procedures for releasing relevant information to the governing body and new advisers

• understand the risks associated with transitioning to a new provider and put plans in place to mitigate them

• plan effectively for the transition to a new adviser or service provider, setting out the key steps, actions, decisions, owners, and timescales, including how costs will be met

• consider whether changes to internal structures, governance arrangements or resourcing are required to manage the contract effectively, both during transition and once the new provider is in place

Ratings and recommendations 

5.37. In a similar manner to external auditor Value for Money assessments or internal audit reports, assessors should give an assessment of the administering authority’s performance in each area covered (see “Key Criteria” section above), assigning a rating to each. Assessors are not expected to give a single rating which covers the entire review. 

• GOLD RATING: meets legal requirements, statutory guidance, and displays excellent practice as set out in this guidance, including excellent monitoring and implementation of all policies and procedures as intended

• GREEN RATING: meets legal requirements, statutory guidance, and displays effective governance to monitor the implementation of legally required policies and procedures as intended

• AMBER RATING: requires improvement as it does not appear to meet legal requirements or statutory guidance in some areas, but operation of the fund is still proceeding effectively

• RED RATING: requires improvement as it does not appear to meet legal requirements or display appropriate governance and monitoring, and operation of the fund is ineffective and/or serious weaknesses have been identified. A ‘RED’ rating does not necessarily mean the fund will be subject to intervention from MHCLG

5.38. Where non-compliance with legal obligations is found, general considerations on breach reporting apply, in addition to requirements set out in this guidance. Assessors and administering authorities should flag breaches of material significance to the Pensions Regulator.

5.39. Assessors carrying out a governance review are expected to make recommendations. The administering authority should then consider the recommendations, as detailed in the “Outcomes” section of this guidance.

Outcomes of an IGR 

5.40. Persons carrying out an IGR should include recommendations for improvement as part of the IGR.

5.41. The pension committee (or equivalent) should consider the recommendations of the IGR and develop and publish an action plan in response. Recommendations should be taken forward in a timely manner. An action plan should be published within 6 months of the review being received, and the pensions committee and local pensions board should review the implementation of the action plan within 12 months. An IGR should also review the development implementation of the action plan from the previous IGR.

5.42. Regardless of the recommendations from their IGR, administering authorities may consider if they wish to enter into the Local Government Association LGPS peer support process. There is no statutory requirement to do so and the peer support process is not solely aimed at funds which require active support to meet minimum requirements. 

5.43. If an administering authority does not carry out the IGR in line with regulation 116A, including not publishing on time, the authority should self-report to The Pensions Regulator, in the same way as any other instance of materially significant non-compliance with legal duties.

5.44. Regulation 116A(10)(b)(ii) requires persons carrying out a review to send the report to MHCLG. The Department will consider reports on a case by case basis. It is expected that, for the majority of reports, no MHCLG action will be necessary. 

5.45. Where a governance review has identified significant findings, the Secretary of State will consider the findings. The government may request additional information for the Secretary of State and may enter discussions with the administering authority, focussing on the authority’s action plan. The Secretary of State may consider taking last-resort actions in exceptional cases such as where there is no credible action plan or where insufficient progress is being made in implementing the action plan in a reasonable timescale. Any action taken would be using the powers of the Public Service Pensions Act 2013 which provide for regulations on the winding-up and merger of pension funds. 

5.46. Where a governance review has identified significant findings, the Pensions Regulator may consider the information in line with their usual approach. This process may take place alongside the consideration by the Secretary of State. The Pensions Regulator is independent and cannot and will not be directed to consider a course of action regarding a specific administering authority but may consider publicly available governance reports published under Regulation 116A(11).