New guidance on investment regulations shows the UK government as having heeded local government pension scheme concerns about asset pooling, according to the Local Authority Pension Fund Forum (LAPFF).

The association welcomed the guidance published last week by the Department for Communities and Local Government (DCLG) for local government pension schemes (LGPS), saying it shows the government to be in “listening mode”.

Kieran Quinn, chair of the LAPFF and of the Greater Manchester Pension Fund (GMPF), said: “The real value of this new guidance is that it reflects many of the views submitted to the government by funds about the challenges facing their plans for pooling and the new investment frontiers for local authority pension funds.”

The LAPFF praised the guidance on pension fund governance in the pooling context, particularly the renewed emphasis on the autonomous role of pension funds and the need for pools to be accountable to their individual member funds.

It also welcomed added emphasis on the role of the Scheme Advisory Board (SAB) and its being given new responsibilities, saying that a stronger SAB would “support member-direction over the pace and nature of change being undertaken through pooling”.

Quinn said: “[We] is pleased to note the guidance reflects several of the key concerns exercising LAPFF member funds over the last few months about the direction of travel that pooling was taking. This new guidance alters that course for the better.”

The LAPFF also said the guidance made two “very important” new points with respect to ESG, namely the requirement for the LGPS to commit to the Financial Reporting Council’s Stewardship Code, and to have a policy on corporate governance and voting.

“This closes the door on those who have ignored their responsibilities by assuming that not having a policy is acceptable,” the association said.