Debating public sector pensions

At no point in the past 40 years have local authority pensions provoked so much attention. 2010 will no doubt be a difficult year for local authority pension funds. Increased public scrutiny, a complex valuation process, a changing political environment – LGPS administering bodies will have to deal with it all.
In the midst of this shifting landscape, the NAPF’s Local Authority Conference provides an opportunity for those involved in the local authority world to hear from leading government and industry figure on the major issues affecting the LGPS over the coming months.  
This year, sessions will focus on:

  • The 2010 valuation
  • Engaged investing and the LGPS 
  • The changing political landscape and the affects on the LGPS
  • Reassessing risk in the economic downturn
  • Effective administration

Additionally, we have recognised that the economic recession has impacted everyone, including local authorities. Because we understand that local authority budgets are under pressure, we have reduced the fees for local authorities by 50 per cent.  
This year’s conference will take place at the Belfry Hotel in North Warwickshire. So please do come and share good practice, discuss the challenges of the year ahead, and learn about practical solutions with everyone in the LGPS world.  

Debating hot topics
We have an exciting programme lined up, which has been developed with help from our steering group of local authority pension fund managers. As well as big plenary sessions with speakers and panel debates, we also have smaller break out concurrent sessions to allow discussion on the latest practice in areas such as administration and investment. These concurrent sessions are real opportunities to learn about “hot topic” issues and discuss practical concerns.
This year, the administration stream will focus on good practice in working with the employers within your fund, which is one of the hardest elements of running the LGPS. Another issue covered will be switching fund managers – do local authorities do it too often or too little?
The ‘thought leadership’ stream looks at the emerging strategic issues facing local authority funds. This year the opportunities and risks of environmentally responsible investment will be considered, along with an analysis of emerging markets, and where growth will come from in the next decade.
The investment stream will focus on alternatives, and whether attempts to diversify have really worked in the last few years. We have three investment experts to consider the latest developments in areas such as property and private equity. In addition there will be a presentation from DEFRA on how they have used private insurance markets to reduce risk on a public sector scheme.  
The conference will start with a bang on Monday 17 May with the first fringe meeting, sponsored by Man Investments. Delegates will hear about hedge funds and their managers, and the pros and cons of using managed accounts as part of an alternative investment strategy. The evening will be rounded off with a welcome drinks reception, where delegates will have a chance to catch up on the news from the past year.

Finding sustainable solutions
On Tuesday, the exhibition and conference opens with a welcome speech from Joanne Segars, chief executive of the National Association of Pension Funds. Over the recent weeks and months, the NAPF has challenged the headline-seeking claims of trillion pound deficits. These claims often generate more heat than light and are unhelpful in illuminating our understanding of the current situation. To this end, the NAPF has recently called for a Public Sector Pensions Commission which would be able to look beyond short term political concerns towards a more sustainable solution.
The NAPF feels that we need an informed debate about the future of public sector pensions separate from the heated pre-election atmosphere. This will be a key theme throughout this year’s conference as we look at the major issues affecting the LGPS for the coming year.  
The first keynote speech of the conference from Nick Timmins of the Financial Times will set the scene – he’ll discuss how the current economic outlook will affect the future of public sector finance going forward. There is no doubt that the LGPS has been and will continue to be affected by the current economic recession, but this should not be used against the LGPS. Indeed, the challenges facing the LGPS are fundamentally the same challenges all pension schemes have faced over the past few years.
However, commentators have continued to press for reforms to public sector pensions. Delegates will hear the arguments for and against further reform of the LGPS in the Big Debate. The LGPS did undergo reforms only a few years ago – but have they gone far enough?
After the conference has reconvened from the concurrent sessions, delegates will hear about one of the main events on the 2010 LGPS calendar: the 2010 valuation. The work of the 2010 valuation will of course be well under way and we’ll hear from some of the biggest actuarial and accounting firms and from the local authorities themselves on what their initial work is telling us about scheme liabilities, the direction of contributions and the overall future of the LGPS.  

Sharing best practice
Delegates will then have the chance to learn about investment in the LGPS from Richard McIndoe of the Strathclyde Pension Fund. Strathclyde is one of the largest LGPS funds and has a highly active and specialised investment strategy. We’ll hear how Strathclyde sets its strategy and how it works in practice.
The day will be rounded off by the annual Conference Gala dinner, where delegates will hear an entertaining and informative speech from Ken Livingstone. Ken was Leader of the Greater London Council from 1981 to 1986 and was elected Mayor of London from 2000 to 2008 – the first person to ever hold this office – so has a wealth of experience in local and regional government.
The final day of the conference begins with a panel debate on the big challenges for the LGPS in the coming year – such as the results from the 2010 valuation and the changing political landscape. One issue we expect to be raised is “cap and share”, the new system for sharing costs.
The panel will be made up from influential and well-known figures from the LGPS, including Terry Crossley from the Department for Communities and Local Government, Bob Summers from CIPFA, and Peter Morris from the Greater Manchester Fund. By the time the NAPF Local Authority Conference convenes in May, the new government will just be settling down and many people will be interested to hear what the implications will be for the LGPS fund.
The LGPS has emerged from the financial crisis largely unscathed compared to other financial institutions. However, there are still lessons to be learned, and the next session will examine whether we need to reconsider how risky some businesses and assets are. A leading custodian and rating agency will discuss what local authorities should take away from the events of the last few years.
The final session of the conference will be a keynote speech from the Rt Hon Michael Portillo. Mr Portillo will give conference delegates his analysis of the post-election environment for the public sector and the LGPS. Mr Portillo has been involved in politics since 1976 and served as Member of Parliament for Enfield Southgate from 1986 to 1992, and again from 1999 to 2005 for Kensington and Chelsea.  
The NAPF Local Authority Conference provides those involved in the LGPS world with a chance to share their insights, concerns, and advice. 2010 will present local authorities with a unique set of challenges and this year’s programme will address them all. Make sure to book now to secure your place.  

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