The government has launched a consultation on two draft statutory instruments, designed to deliver several of the key Local Government Pension Scheme (LGPS) changes included in the Pension Schemes Bill.

The government previously confirmed that it would be pushing ahead with the majority of the proposals outlined in its LGPS fit for the future consultation, including plans to fully consolidate the scheme into asset pools, strengthen the governance of administering authorities (AAs) and pools, and boost LGPS investment in their localities and regions: 

Whilst primary legislation to implement the reforms is being taken forward through the Pension Schemes Bill, which is currently progressing through parliament, this consultation seeks views on two draft statutory instruments that will implement the specific LGPS proposals in the wider bill.

The consultation, which closes on 2 January 2026, is therefore seeking views on whether the two draft statutory instruments will effectively deliver the policy proposals set out in the government’s response to the LGPS fit for the future consultation.

In particular, the LGPS (Pooling, Management and Investment of Funds) Regulations 2026 will replace the LGPS (Management and Investment of Funds) Regulations 2016 and give legal effect to the proposals relating to pooling and local investment.

As part of this, it will require AAs to delegate the implementation of their investment strategy to their asset pool, require AAs to take principal investment advice from their pool, and require all assets to be controlled and managed by the relevant asset pool.

It will also provide backstop powers for the Secretary of State to direct AAs to participate in specific pools, and for specific pools to facilitate participation and establish minimum standards for pools, including Financial Conduct Authority (FCA) authorisation and capacity to manage local investments.

The legislation will require compliance from 1 April 2026, subject to the passage of the Pension Schemes Bill through parliament. "Limited flexibility" will be given in specific cases.

Meanwhile, the LGPS (Amendment) Regulations 2026 will implement the proposals in relation to governance issues.

This includes changes to strengthen governance arrangements for administering authorities, require regular governance reviews aligned with valuation cycles and provide powers for the Secretary of State to direct governance reviews where necessary.

This will again require compliance from 1 April 2026, subject to the passage of the Pension Schemes Bill through parliament, although the government has included lead-in periods for specific requirements. 
  
Both sets of regulations will be supported by guidance, which the government is in the process of engaging with stakeholders on the content of.

"We will provide an update on that workstream in our government response to this consultation," it stated.

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