Nearly three-quarters (72 per cent) of Local Government Pension Scheme (LGPS) funds expect ‘mostly positive ratings’ from their independent governance reviews, a survey at the Pensions UK Local Authority Conference has found.

The government has published the outcome of its LGPS 'Fit for the Future' consultation and laid its final regulations to overhaul investment and governance arrangements across the scheme before parliament on 21 May, with the rules due to come into force on 30 June 2026.

The reforms introduce new governance requirements, including mandatory governance, training, and conflict-of-interest strategies; the appointment of senior LGPS officers and independent advisers, known as an ‘Independent Person’; and regular independent governance reviews.

Responding to an audience poll at the Pensions UK Local Authority Conference, 72 per cent of respondents expect ‘mostly positive ratings with potentially some ideas for governance improvements’ from their first independent governance review.

Seventeen per cent expected confirmation that the fund is well governed with no actions/improvements required, with 12 per cent ‘not sure but hoping for mostly positive ratings’.

Commenting on the results, panellist Barnett Waddingham principal and head of LGPS governance, Alison Murray, stated that she understood that the draft guidance wants individual funds to think about what works for them, so not to have a template report; however, “inevitably people will want to compare and collate all the information… I do think that that comparison will be useful, and it would be good if that was thought about at an earlier stage”.

Another area Murray found “a little bit weird” in the draft guidance was that there is no sense that the second independent governance review would require the action plan from the last review being implemented.

Meanwhile, 44 per cent of attendees described their funds’ readiness to implement the Independent Person requirement as ‘well advanced’, with a further 25 per cent stating that ‘planning is underway’.

Nineteen per cent responded that they were aware of the requirements but had no formal plan yet, and 13 per cent were still working through what the changes mean in practice.

According to fellow panellist, Dalriada Trustees senior client director, Mandy Kaur-Sadler, “it's fantastic to see that even though we haven't yet got the statutory guidance, that you're already really well planned and starting to finish the process.

"More than half of you are already well advanced or have planning underway, and there are still some people that are aware of the requirements and still working through, which is not surprising, because we haven't got the guidance," she added.

Kaur-Sadler also highlighted that having independent advisers had been “working really well in the private sector for decades now, so it's although it's a new concept within the LGPS, having an Independent Person and having that independent expert oversight isn't a new concept within pensions”.

When determining how a fund should judge whether governance has improved, 27 per cent of respondents cited ‘clarity of roles and responsibilities with evidence of improved decision-making and accountability’, with 24 per cent stating ‘clearer strategies/policies, including risk management’.

A further 22 per cent said it was ‘stronger challenge and scrutiny’, as well as ‘more focus on governance and administration oversight’. Just 4 per cent considered it to be ‘more discussion/debate at meetings’.

Overall, Kaur-Sadler noted the LGPS governance and pooling reforms have an “underlying purpose around strengthening the confidence in the decision making process”.

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