Pensions - Articles - LGPS funds need to take the right view of risk

Aon is highlighting the importance of effective risk management to administering authorities throughout the UK responsible for managing Local Government Pension Scheme (LGPS) funds.

 Aon has worked with the Chartered Institute of Public Finance and Accountancy (CIPFA), to revise and update ‘Managing Risk in the Local Government Pension Scheme’. The guidance explores how risk manifests itself across the broad spectrum of activities that constitute LGPS financial management and administration. The publication then explains how, by using established risk management techniques, these risks can be identified, analysed and managed effectively.

 Alison Murray, partner at Aon and Head of Public Sector Actuarial, said: “Effective risk management stands at the heart of sound corporate governance across all organisations and functions and the LGPS is certainly no exception.

 “We believe that many LGPS funds already have well developed and effective risk management strategies in place. However, in supporting CIPFA in relaunching this publication our intention is to encourage administering authorities to step back and to review their approach to all aspects of risk management – something which is particularly important given recent changes to the operation and governance of the LGPS and the changing circumstances of (Tier 3) scheme employers.”

 Neil Sellstrom, Pensions Network Advisor, CIPFA, said: “The introduction of new governance requirements in the LGPS in 2015, specifically the Pensions Regulator’s new role and the establishment of local pension boards, reflects the increasing importance of risk management. It also reinforced the need for administering authorities to focus their risk management activities on all areas of scheme management and not just investment.

 “Risk mitigation and control is well established in private sector schemes but in producing this guidance, we were keenly aware of the special nature of the LGPS as a funded public service scheme, most of whose participating employers are likely to have a greater capacity to absorb risk than their counterparts in the private sector. It is important therefore to strike the right balance between risk control and being too risk averse. Our guidance aims to help administering authorities to develop a risk management framework which will enable them to decide which risks can and should be controlled, and where the upside potential justifies taking the risk.”

 ‘Managing Risk in the Local Government Pension Scheme’ 

Back to Index

Similar News to this Story

Businesses want extension of auto enrolment to more workers
Employers support the targeted extension of automatic enrolment to more workers. 74% of businesses want to see it made available to the self-employed
TPR issue single code of practice statement
As part of becoming clearer, quicker and tougher we intend to make changes to our existing codes of practice. These changes will ensure that we are se
No such thing as a typical drawdown customer
According to research from Royal London income drawdown customers are taking full advantage of pension freedoms to take their income in a variety of w

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS


Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.