UK - The government has been advised to overhaul the accountability arrangements for the UK's Local Government Pension Scheme.

The call comes from the Audit Commission, the body that monitors how public money is spent. The commission's chief executive Steve Bundred said he's written to local government minister Ruth Kelly "calling for the accountability arrangements for the local government pensions scheme to be overhauled".

"With the pensions crisis looming so large, the prevailing fixation on cost may be inevitable," Bundred wrote in the Financial Times. "But affordability is only one aspect. Effective management of pension funds to ensure that they run well and secure solid returns is equally vital."

He pointed out that there are 81 individually managed funds within the LGPS, with some £90bn of assets.

Bundred wants the funds treated as standalone bodies, with balance sheets quite separate from their councils.

"That would enhance accountability and start to sharpen up funds focus on their financial management and performance."

He added: "In particular we strongly favour public reporting about how a fund compares and benchmarks its performance against other local government funds."

Elsewhere, the Association of Consulting Actuaries (ACA) released a survey finding workplace pensions in smaller firms are under "growing threat".

Over half of these smaller firms have reviewed their pensions in the last 12 months or are doing so at present.

 

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