Published by Melanie Stephenson on
Estimated reading time: 3 minutes
Investment pools have been given a target date of 1 April 2018 to be established formally. Melanie Stephenson, Associate in Public Sector Consulting, reports back from the LGC Investment Seminar – braving the “Beast from the East” to do so!
Those of us who could make it through the treacherous and snowy conditions earlier this month attended the 2018 LGC Investment Seminar in Carden Park; the forum offered delegates a chance to listen to a range of speakers who focussed their talks around the theme of “Keeping the LGPS affordable”. Turnout was still surprisingly good - despite the weather!
Many of the sessions focussed on this theme of affordability, with an acknowledgement that even though budgets are being restrained in the short term, we should still be focussing on the long term when we are looking at investment strategy and setting actuarial assumptions to assess costs in terms of the LGPS.
Only two speakers were unable to make the event due to weather conditions. One of those speakers was our very own Head of Public Sector, Graeme Muir, who had been trapped by the “Beast from the East”. It was therefore down to me to take over the reins at the last minute to talk about keeping the LGPS affordable from an actuarial point of view; trying to help delegates understand the different methodologies for assessing costs and how that feeds into setting an appropriate investment strategy.
Investment pools have been given a target date of 1 April 2018 to be formally established. With the date looming, there was a lot of discussion around investment pooling, how progress is being made (and measured) as well as the different structures that the pools are taking. From an actuarial point of view, we do not need to take any immediate action when it comes to valuing liabilities, but we do look forward to working closely with investment advisors in the run-up to the 2019 valuation. The key message is that the pool is providing Funds with the building blocks to form their investment portfolio and to provide support - but the actual investment strategy remains the responsibility of the individual Fund and should provide opportunities for smaller Funds to invest in assets that they couldn’t before.
“the actual investment strategy remains the responsibility of the individual Fund and should provide opportunities for smaller Funds to invest in assets that they couldn’t before”
It will be interesting to see what the new local government minister Rishi Sunak brings to the table regarding investment pools. We hear that he has already met with the Local Government Association and the Ministry of Housing, Communities and Local Government. There are also plans for him to attend a future Scheme Advisory Board meeting - so watch this space!
Finally, the effect of Carillion going into liquidation in January was touched upon and as far as we are aware, it has had little impact on the LGPS. However, we would use this issue to highlight the importance of monitoring the funding position of all employers, particularly as they near the end of their admission agreements.
I think the record journey time for attending the conference was eight hours; I haven’t heard what the record was for getting home, but in the conditions we were faced with, I wouldn’t be surprised if that record was broken. We hope everyone made it home safely.