Recent developments in Local Government Pension Scheme (LGPS) legislation, mean employers may have more options for managing assets and liabilities in their fund, from closure, to future accrual.
More widely, the financial risks in the LGPS, which are often material for employers, can mainly be managed effectively through collaboration with your fund.
In the lead up to the 31 March 2022 actuarial valuation, housing associations should consider using this opportunity to fully understand the underlying risk profile of your participation and the tools at your disposal for managing this risk at all levels, , from data management and employer categorisation through to use of your covenant and investment strategy.
The time between now and March gives housing associations an opportunity to build knowledge in advance of engaging with your Fund during the valuation period.
This a great time to start work on this, with four months to go until the next LGPS valuation date on 31 March 2022, effective pensions risk management will allow you to manage your pension risks, alongside your wider organisational objectives (rather than just pensions in isolation).
Housing associations should initially be looking to assess the risks that the LGPS presents and quantify those risks and possible mitigation actions, including the following:
This can inform your risk committee and help form a strategy in line with business objectives before engagement with your fund.
Isio is one of the country’s leading independent pensions advisory firms, known and respected for its agility and the team has more than 1,000 client relationships. We're working with our pensions advisers Isio to keep the sector up to date on key areas affecting housing associations.Find out more