LGPS investment regs need to be 'simplified'
UK - The Chartered Institute of Public Finance and Accountancy (CIPFA) intends to recommend the government simplify and modernise the investment regulations for Local Government Pension Scheme (LGPS).
CIPFA revealed the recommendations, to be published in a report later this year, will be based on the results of a survey of LGPS managers initiated in March to "gauge practitioners' views on the use and application of the current LGPS investment regulations".
The investment regulations working group established by the CIPFA Pensions Panel and chaired by Peter Scales, former chief executive of the London Pension Fund Authority, are currently considering a number of detailed recommendations to put forward to the department for Communities and Local Government (CLG), which has overall responsibility for the LGPS.
These recommendations will be "aimed at clarifying the rules on permitted investments and borrowing, and the use of overseas investment managers", with CIPFA planning to work with the CLG and LGPS administrators to implement the changes to "improve investment management within a stronger, modern investment framework".
The working group was established earlier this year to "investigate whether there is a case for approaching the CLG to revisit the investment regulations" following recent changes in the investment landscape, such as the introduction of new investment vehicles and markets and the occurrence of "significant market events which have exposed systemic and other risks that need to be properly managed".
It is anticipated the final report will be submitted to the Pensions Panel by the end of 2008, although recent market turbulence may have caused some delay to the process.
Bob Summers, chair of the CIPFA Pensions Panel, said: "When we began this exercise, we were in a very different world. I have therefore asked the working party to look at the recommendations afresh in the light of current market conditions and the much-changed risk environment, to ensure the changes we are proposing are the right ones for the LGPS both now and for the future."
However he added: "In due course, we would hope to see CLG take on board our recommendations in full".
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