Westminster's Pension Board is preparing for significant governance changes as a new bill aims to reshape the Local Government Pension Scheme (LGPS) landscape. The Pension Schemes Bill, expected to receive Royal Assent in March 2026, will place asset pooling on a statutory footing and enhance governance structures, with key changes coming into effect on 1 April 2026.
Under the new legislation, all fund investment assets must be pooled into asset pool companies, such as London CIV (LCIV), by 31 March 2026. Westminster is currently working with officers across London and LCIV to finalise crucial investment management and service delivery agreements. These agreements, which allow LCIV oversight of the fund's assets, are due to be signed by the same deadline. A minor amendment has been agreed to shorten the conflict resolution period from 90 days to 30 days.
The bill also mandates that funds conduct independent governance reviews aligned with actuarial valuation cycles, occurring every three years. The first review must cover the period ending 31 March 2027 and be completed by 31 March 2028, with a requirement for these reviews to be published. The Secretary of State retains the power to direct a review if issues are identified.
Furthermore, Administering Authorities must appoint a dedicated senior LGPS officer by 1 October 2026, provided pension functions are delegated. This role will oversee scheme administration and investments, operating under statutory guidance. Crucially, this officer cannot hold existing statutory roles such as section 151 officer, head of paid service, or monitoring officer, and must possess appropriate qualifications and experience.
Concerns were raised during the Pension Board meeting on Thursday, March 26, 2026, regarding the potential loss of the fund's independent investment consultant under the new regime. Members highlighted this as a significant conflict of interest and a major concern, particularly the requirement to take advice solely from the pool. This comes amidst government reforms that may be partly driven by a desire to curb excessive expenditure among a minority of authorities, though there is a risk that new regulatory arrangements could compromise the fund's historically strong performance.
The report also detailed the top five risks to the Pension Fund. These include regulatory and compliance risks related to the proposed LGPS reforms, and asset and investment risks stemming from geopolitical uncertainty and market volatility. Specifically, 'Asset and Investment Risk' is described as significant volatility and negative sentiment in global investment markets following disruptive geopolitical and economic uncertainty, including the potential impact of trade tariffs, the conflict between Russia and Ukraine, and the situation in Israel and Gaza.
An update on London CIV indicated stable staff retention and positive recruitment, including the appointment of a new Chief Investment Officer.
Several members noted that this meeting would be their last due to the end of the council term, with thanks extended to officers and fellow board members for their collaborative efforts. Further details can be found in the Public reports pack and the Pension Board admin service Update.
