Most Local Government Pension Scheme (LGPS) funds do not have sufficient staff and skills for their current day-to-day operations, with pay identified as a significant barrier to recruitment, according to a study from Aon.

While funding levels and reduced employer contributions have been a boost to LGPS funds, the polling revealed that administering authorities have wider concerns about staffing.

Respondents were asked: “Do you feel that your LGPS organisation has sufficient staff with the required skills to carry out your day-to-day operations?” and nearly three-quarters answered no, they did not have sufficient resource.

A further 16 per cent said they did have the right staff and skills currently, but that they would not be in that situation in the future.

When asked whether the pay and reward packages offered by the LGPS were enough to attract and retain staff, 60 per cent said that these were not sufficient.

Aon LGPS talent solutions lead in the UK, Craig Payne, said that “internal teams [within administering authorities] face specialist skills gaps and capacity restraints, while also having to deal with increasing regulatory and reporting demands".

Payne added: “These people and capacity pressures create real operational risks. Those range from delays in processing member cases and responding to employers, through to challenges in implementing regulatory change and managing complex projects such as McCloud, pensions dashboards and implementing the updated and backdating of survivor’s benefits.”

Aon director of public sector pensions in the UK, Laura Caudwell, said there were challenges and opportunities: “There is the chance to take stock and ensure stronger operational resilience, starting with appointing the LGPS senior officer.

"But this success can only come through investing in people and processes, ensuring teams have the skills to make their fund ‘fit for the future’ – and making certain that the member experience keeps pace with rising expectations.”

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