LGPS pension reforms are set to provide a significant boost to the UK's economic growth, according to discussions at the Kingston upon Thames Pension Fund Panel meeting on Wednesday, 23 September 2026. The reforms, part of the government's Fit for the Future initiative, aim to improve saver outcomes and tackle inefficiencies within the pension system.

Bar chart showing the growth of the Pension Fund's net assets from £792m in 2016/17 to £1,410m in 2025/26.
Bar chart showing the growth of the Pension Fund's net assets from £792m in 2016/17 to £1,410m in 2025/26.Source: Pension Fund Panel papers, 23 September 2026

Key changes include strengthened governance arrangements, asset pooling, and a greater focus on local investment. The legislation confirms that strategic decision-making will remain with partner funds, while implementation will be handled by investment pools such as London CIV.

Katherine Gray, Head of Pensions Investments and Treasury, updated the panel on the progress of these reforms. She highlighted that an Investment Management Agreement (IMA) was signed in May 2026, granting LCIV full control over investment implementation. This agreement is crucial for pooling investments, allowing LGPS funds to collaborate more efficiently and manage larger sums of money.

Governance changes are also a significant aspect of the reforms. By 31 December 2026, a Senior LGPS Officer (SRO) is to be appointed to oversee all aspects of the pension fund, from administration and governance to investments. This role must not be combined with the Section 151 Officer role or the Head of Paid Service (Chief Executive). The SRO appointment is currently being recruited to, with approval sought from Sutton Council's Strategy and Resources Committee in November, and the appointment is expected to be effective from 1st December.

Additionally, an Independent Person will be appointed by the same date to assist the SRO and the Pension Panel in their scrutiny and challenge roles. This individual must possess appropriate professional qualifications or significant relevant experience, covering all areas of the pension fund including decisions on investment strategy, governance, administration, and the role of the administering authority as a shareholder and client of its asset pool company. The Fund is supported by Marian George, a qualified Actuary with Pensions Administration qualifications, who has been appointed as the independent person for other LGPS funds. The appointment of the Independent Person will be confirmed following the appointment of the SRO.

Councillor Yvonne Tracey inquired about the expertise required for the new Independent Person, specifically regarding responsible investment and human rights. Ms. Gray stated that while not a statutory requirement, professional advisors typically possess such knowledge. Marion George, the independent advisor, added that the reforms aim to enhance governance across all LGPS funds to the highest standards, with a particular emphasis on training and scrutiny in meetings.

Stringent knowledge and training requirements are being introduced for Panel members and officers. This includes online training for general background knowledge and dedicated in-person sessions for key items. The training strategy must explicitly cover the required knowledge levels for all relevant roles, including substitute members, and compliance will be monitored and reported. An Independent Governance Review will also be commissioned by March 2028 to assess the Fund's risk management, business planning, and compliance with the code.

A bar chart illustrating the asset allocation of the Pension Fund, comparing current 'Funds' allocation against the 'SAA' (Strategic Asset Allocation) for various asset classes including Listed Equity, Private Equity, Property, Infrastructure, Private Credit, Credit, UK Govt Bonds, and Cash.
A bar chart illustrating the asset allocation of the Pension Fund, comparing current 'Funds' allocation against the 'SAA' (Strategic Asset Allocation) for various asset classes including Listed Equity, Private Equity, Property, Infrastructure, Private Credit, Credit, UK Govt Bonds, and Cash.Source: Pension Fund Panel papers, 23 September 2026

The reforms also introduce a greater focus on local investment. The Fund is required to set a target for local investment, which has been set at 0% to 5% of the fund within the Investment Strategy Statement. Local is defined as the pool area, encompassing the whole of London plus Buckinghamshire. Currently, the Fund has approximately 2.6% invested locally through investments in the London Fund, property investments in London, and the UK Housing Fund, which invests in affordable housing, some of which is in London. While more projects are being considered, they are not going to be hyper-local, and the Fund will not be able to direct money into their own, for lots of reasons, into their own, yeah, kind of borough. The primary focus is not to actively go and look for local investment, but rather to ensure that any local investment has to stack up against any other investment and makes the investment return.

For more details on the pension fund's performance and asset allocation, refer to the Public reports pack Wednesday 23 September 2026 and the Agenda frontsheet Wednesday 23 September 2026.