WMPF welcomes commitment from government to accelerate scheme-wide reform and governance

The Chancellor of the Exchequer recently delivered her first Mansion House speech on the evening of Thursday 14 November 2024.

The UK Government has set out proposals for LGPS investments in three areas:

• Reforming asset pools
• Boosting local investment
• Strengthening governance

West Midlands Pension Fund is well aligned to the aspirations of Government in all these areas.

We have made significant progress with our pooling journey to date. The model created by us, in collaboration with Partner Funds, achieves the Government’s requirements for a FCA regulated entity.

We have sought to contribute to the regional growth environment and economy working in partnership with the West Midlands Combined Authority and other stakeholders in the region.

We welcome the approach to strong governance and accountability, and we have been recognised as a market leader in this regard. We believe that the finer details of future governance arrangements will be best refined locally, in context of, and building on the effective practices developed in dialogue with regional stakeholders and representatives.

Having operated with scale and a more delegated decision-making model with expert oversight for some time, we see the additional value add from good governance. We welcome the opportunity to engage in further dialogue with colleagues to further enhance the sustainability of the LGPS.

“The LGPS has a long and successful history of serving its members, ensuring they are able to effectively plan for retirement and secure a sustainable retirement. We welcome the commitment from government to enable and enhance governance scheme-wide and support the move to facilitate informed consolidation in our sector where changes can deliver greater value and sustainability for our members over the long term.”  - Rachel Brothwood, Executive Director

To view the consultation on a package of proposed reforms to the structure, investments, and governance of the LGPS, which closes on 16 January 2025, please visit Local Government Pension Scheme (England and Wales): Fit for the future

Notes to editors

The West Midlands Pension Fund provides Local Government Pension Scheme services to over 340,000 members and more than 840 employers across the West Midlands region. It is the second largest LGPS Fund in England and Wales with over £21 billion of assets. Over £7.3billion of these are invested in the UK in a wide range of assets including infrastructure projects, private equity and property.

Employers include the seven Local Authorities: Birmingham City Council, Coventry City Council, Dudley Metropolitan Borough Council, Sandwell Metropolitan Borough Council, Solihull Metropolitan Borough Council, Walsall Council and the City of Wolverhampton Council (who are also the Administering Authority), together with the West Midlands Combined Authority for the seven Constituent Authorities.

The Fund, working with Partners from across the Central region, created and established LGPS Central Limited in 2017. Responding to the requirement from Government to create an FCA regulated entity owned by Funds with the aim of achieving the required objectives.

To date, the Fund has transitioned over 50% of its assets to the Pool, with a further 35% under management of the Pool company.

Earlier in the year, the Fund was recognised for its strong governance and investment strategy achieving awards in both categories in the Local Authority Pension Fund Investment Awards 2024. In 2023 the Fund won the Investment Innovation Award for its collaboration with the West Midlands Combined Authority to support growth and innovation among new companies and technologies within the region via the new West Midlands Co-Investment Fund.

The Fund has achieved signatory status to the UK Stewardship Code (2020) for the last four years, and has attained accreditations for Pension Administration from PASA, holds Investors in People (GOLD), Customer service excellence and annually undertakes independent benchmarking to inform continuous improvement.

The Governance of LGPS Central pool is overseen by Partners as both shareholder and client. Alongside the governance arrangements of the FCA-regulated pool company LGPS Central Limited. The pool has established a formal governance structure in its Shareholder Forum and Joint Committee, on which pension fund members are represented via invited Trade Union representative.

Further details can be found in the Fund’s Annual report and accounts.