London CIV, the investment pool for London Local Government Pension Funds, has launched a new Pension Advisory and Support Service, LGPS PASS, which is designed to help reduce costs and strengthen long-term sustainability within the LGPS community. With annual fee savings of +50% envisioned for boroughs that adopt LGPS PASS, solutions within the new offer have already been taken up by a quarter of London CIV’s partner funds.
LGPS PASS is a choice of insight-led investment advice and results-driven support services that have been built out by London CIV, in partnership with London boroughs to help the LGPS community achieve stronger outcomes, with a particular focus on driving cost efficiency, generating consistency and increasing expertise.
LGPS PASS is made up of investment services and strategy & policy support exclusively designed for the LGPS community. Investment services include cash flow forecasting, climate analytics, triennial valuation support and strategic asset allocation.
Strategy and policy support includes funding, treasury and investment statements, risk register management, constitution and governance documentation and responsible investment policies.
The launch of LGPS PASS follows calls by many Partner Funds for London CIV to step in and provide these services at a time when schemes across the country are facing considerable pressure around regulatory reporting requirements, unprecedented challenges to hire and retain qualified staff, and spiralling costs in consultancy fees.
Public-sector spending on management consultancy providers has risen 62% over five years and nine out of 10 councils say they are experiencing staff recruitment and retention problems, according to a Workforce Survey by the Local Government Association (LGA).
The launch of LGPS PASS also complements the government’s Fit for the Future consultation, which came out after London CIV began work to put LGPS PASS together. The strategy aligns with the government’s call for LGPS pools to provide more services to Partner Funds, including advice and strategic asset allocation support.
London CIV and Partner Fund research suggests this new service could help achieve 50% savings in annual fees for each participating fund As more Partner Funds sign up to LGPS PASS, it’s envisioned that these savings will increase over time.
Daniel Omisore, Deputy S151 at the London Borough of Camden (one of LGPS PASS’ early adopters), said: “We’ve been working closely with London CIV on the formation of LGPS PASS to ensure we have access to reliable, high-quality support at a time when the pressures on local government pensions are intensifying.”
Roger Kershaw, Director of Finance at the London Borough of Merton (another adopter of LGPS PASS), added: “With increasing workloads at the fund level and reduced resources, we see LGPS PASS helping to meet our investment and governance needs at a reasonable cost and in the medium/long term, will help us with investment consultancy as well as providing us with the tools to navigate funding risks more confidently.”
Dean Bowden, CEO at London CIV, said: “A decade ago, the London LGPS community, came together with a shared vision: to collaborate more effectively, to pool resources, and to deliver long-term value for LGPS members and their futures. Today, that vision remains as powerful and necessary as ever.
“As part of our evolution as a community, this choice of solutions has been designed to fill current and future LGPS service gaps, as well as drive down costs. We have an excellent team in place, many of whom come from an LGPS-specific background, who have strong experience around the challenges LGPS Partner Funds face.”
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