Cumbria Local Government Pension Scheme (LGPS) - Governance

"The Guide for Local Pension Boards" was published by CIPFA in October 2018 to add to the existing guidance produced by the Scheme Advisory (SAB) Board and seeks to offer further insight into a range of issues. The publication does not replace the existing SAB guidance or TPR Code of Practice and related guides. Appendix 5 to the guide sets out 21 questions to assess the strength of governance within Local Pension Boards. These questions were reviewed by the Cumbria LGPS Local Pension Board ("the Board") in April 2019. The guide is available on the CIPFA website

The Board's response to the 21 questions will be attached below once finalised.

The Pensions Regulator has a number of statutory objectives including to:

  • protect the benefits of pension scheme members
  • promote, and improve understanding of, the good administration of work-based pension schemes
  • maximise compliance with the duties and safeguards of the Pensions Act 2008.

The regulator has a number of regulatory tools to enable it to meet its statutory objectives. These include issuing Codes of Practice which provide practical guidance on the requirements of pensions legislation and set out standards of conduct and practice expected of those who must meet the requirements.

Codes of Practice are not statements of the law and there is no penalty for failing to comply with them. It is not necessary for all the provisions of a code of practice to be followed in every circumstance. Any alternative approach to that appearing in the code of practice will nevertheless need to meet the underlying legal requirements, and a penalty may be imposed if these requirements are not met.

The Pensions Regulator's Code of Practice 14 ("COP14") specifically relates to the administration of pension schemes and focusses on requirements and expected standards for public sector pension funds in:

  • Governing the scheme
  • Managing risks
  • Pensions administration
  • Resolving issues

Cumbria LGPS Pension Fund have reviewed COP14 and considered the extent to which it complies with the practices set out by the Regulator. This document was last reviewed by the Cumbria Pensions Committee in December 2018 and the Cumbria LGPS Local Pension Board in January 2019.  

Code of practice 14 (PDF 697kb)

Cumbria compliance with the Pension Regulator Requirements V3 (PDF 936kb)

The administration service of the Cumbria Pension Fund is undertaken by Your Pension Service (YPS). As part of the management of this service, YPS provide quarterly performance reports to the Fund and are presented to both the Local Pension Board and the Pensions Committee.

A copy of the performance report from Q1 of 2019/20 can be found here: Q1 CUMBRIA Quarterly Pensions - 2 SEPT 2019 (PDF 1MB)

In 2018, the Fund was selected by the Pensions Regulator as a sample Pension Fund as part of its cohort review of the LGPS. The Pensions Regulator met with the Fund on five separate occasions to review a wide range of governance arrangements within the Fund. The Regulator identified many areas of good practice within the Fund but also made a number of suggestions where the Fund could improve its existing practices.

The action plan to address the findings from this review are contained within the final approved action plan (PDF 644kb).

CIPFA have published a guide for administration in the LGPS to aim to raise the profile and awareness of the pensions administration function within Pension Funds.

Details of how the Cumbria LGPS complies with this guide will be published below in due course.

Stewardship activities include monitoring and engaging with companies on matters such as strategy, performance, risk, capital structure and corporate governance. In the context of the management and operation of a pension Fund, as the owner of investment assets stewardship aims to promote the long term success of companies in such a way that the ultimate providers of capital also prosper. 

The LGPS (Management and Investment of Funds) Regulations 2016, enacted in November 2016 required each LGPS Fund to provide a statement of how the Fund complies with the Financial Reporting Council (FRC) UK Stewardship Code. 

Ministry of Housing Communities and Local Government (MHCLG) guidance on preparing an Investment Strategy Statement (ISS) states that each Fund should explain their policy on stewardship with reference to the Stewardship code, which in turn requires a 'comply or explain' approach. 

Cumbria LGPS Statement of Compliance with the UK Stewardship Code is publicly available as Annex B in the Investment Strategy Statement which forms part of the Cumbria LGPS Fund Policy Document and is available below.

Stewardship Code - Fund Policy Document (PDF 2MB)