Key requirement

Administering authorities must publish their Investment Strategy Statement (ISS) by 1 April 2017. The ISS (which replaces the Statement of Investment Principles (SIP)) must be formulated in accordance with the guidance issued on 15 September 2016.

Key changes introduced by the new regulations

The Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016, which come into force on 1 November 2016, introduce the following key changes:

  • wider, more flexible powers for administering authorities to invest. This change reflects concerns expressed by some responses to the DCLG consultation on the 2009 Investment and Management Regulations that the 2009 Regulations were over-prescriptive in the context of the needs of the LGPS funds
  • power for the Secretary of State to intervene. This reflects the Government’s perceived need to balance the administering authorities’ wider investment powers with appropriate controls. Intervention is permitted where the Secretary of State considers that there is a failure to act in accordance with the Guidance.

Prescribed terms of the ISS

The 2016 regulations provide that the ISS must contain:

  • a requirement to invest fund money in a wide variety of investments
  • the authority’s assessment of the suitability of particular investments and types of investments
  • the authority’s approach to risk, including the ways in which risks are to be assessed and managed
  • the authority’s approach to pooling investments, including the use of collective investment vehicles and shared services
  • the authority’s policy on how social, environmental and corporate governance considerations are taken into account in the selection, non-selection, retention and realisation of investments
  • the authority’s policy on the exercise of the rights (including voting rights) attaching to investments.

View the full details of the 2016 regulations.