Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Ministry of Housing, Communities and Local Government:
To ask His Majesty's Government what guidance they are providing to members of the local government pension scheme about non-financial considerations of responsible investments; and whether they plan to change the requirements for investment and divestment decisions relating to asset or country allocations and responsible investing.
Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)
The government intends to publish updated guidance on preparing and maintaining an investment strategy statement later this spring, subject to the passage of the Pension Schemes Bill and regulations containing the relevant guidance making powers coming into force. This guidance will not be subject to formal public consultation but was shared for comment with all Local Government Pension Scheme (LGPS) administering authorities, asset pools, and the LGPS scheme advisory board alongside statutory consultation on the regulations.
LGPS administering authorities will be required to set an approach to responsible investment in their investment strategy. The guidance is expected to restate the existing position that when setting their investment strategy administering authorities must consider all factors, including environmental, social and governance factors, that are financially material to the performance of investments, and that non-financial factors can also be taken into account provided they do not risk significant financial detriment to the scheme and administering authorities have good reason to believe scheme members would support the decision.
As with now, neither legislation nor guidance will dictate asset allocations or levels of investment in specific geographies. However, administering authorities remain legally required to comply with UK sanctions, including restrictions on dealings with designated individuals, entities, and countries.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Ministry of Housing, Communities and Local Government:
To ask His Majesty's Government whether they have finalised the updated local government pension scheme guidance on preparing and maintaining investment strategy statements; and if so, when they plan to publish that updated guidance.
Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)
The government intends to publish updated guidance on preparing and maintaining an investment strategy statement later this spring, subject to the passage of the Pension Schemes Bill and regulations containing the relevant guidance making powers coming into force. This guidance will not be subject to formal public consultation but was shared for comment with all Local Government Pension Scheme (LGPS) administering authorities, asset pools, and the LGPS scheme advisory board alongside statutory consultation on the regulations.
LGPS administering authorities will be required to set an approach to responsible investment in their investment strategy. The guidance is expected to restate the existing position that when setting their investment strategy administering authorities must consider all factors, including environmental, social and governance factors, that are financially material to the performance of investments, and that non-financial factors can also be taken into account provided they do not risk significant financial detriment to the scheme and administering authorities have good reason to believe scheme members would support the decision.
As with now, neither legislation nor guidance will dictate asset allocations or levels of investment in specific geographies. However, administering authorities remain legally required to comply with UK sanctions, including restrictions on dealings with designated individuals, entities, and countries.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Ministry of Housing, Communities and Local Government:
To ask His Majesty's Government whether they plan to hold a public consultation regarding changes to the local government pension scheme guidance on preparing and maintaining investment strategy statements.
Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)
The government intends to publish updated guidance on preparing and maintaining an investment strategy statement later this spring, subject to the passage of the Pension Schemes Bill and regulations containing the relevant guidance making powers coming into force. This guidance will not be subject to formal public consultation but was shared for comment with all Local Government Pension Scheme (LGPS) administering authorities, asset pools, and the LGPS scheme advisory board alongside statutory consultation on the regulations.
LGPS administering authorities will be required to set an approach to responsible investment in their investment strategy. The guidance is expected to restate the existing position that when setting their investment strategy administering authorities must consider all factors, including environmental, social and governance factors, that are financially material to the performance of investments, and that non-financial factors can also be taken into account provided they do not risk significant financial detriment to the scheme and administering authorities have good reason to believe scheme members would support the decision.
As with now, neither legislation nor guidance will dictate asset allocations or levels of investment in specific geographies. However, administering authorities remain legally required to comply with UK sanctions, including restrictions on dealings with designated individuals, entities, and countries.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Ministry of Housing, Communities and Local Government:
To ask His Majesty's Government what changes they plan to make to local government pension scheme guidance relating to investment allocations, including how they consider fiduciary duty obligations when implementing responsible investment strategies.
Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)
Administering Authorities in the Local Government Pension Scheme will be required to set an investment strategy for their fund that must include a high-level objective on responsible investment and a strategic asset allocation completed according to a template to be published in guidance. The intended template for the strategic asset allocation is published here (attached). The choice of allocation and tolerance range for each asset class is for the Administering Authority to make, in line with their fiduciary duty to scheme members and employers. Administering Authorities may choose to delegate completion of the template to their asset pool company.
Pools will be required to deliver the investment strategy set by their partner funds, including the objective on responsible investment. In order to maximise the benefits of scale, the government expects partner funds and pools to work together to develop a common approach as far as possible. The government considers that this provides sufficient flexibility to allow funds to meet their fiduciary duty.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, in the light of their legislative plans to cap salary sacrificed pension contributions, whether both workers and employers will have to pay national insurance on pension contributions above the £2,000 limit, or whether only workers will have to pay additional national insurance.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government announced at the Budget last year that salary sacrificed in favour of employer pension contributions will be chargeable to employee and employer NICs from April 2029, but only on amounts exceeding £2,000. This £2,000 threshold ensures that those on higher incomes do not get a disproportionate benefit, whilst protecting lower income employees and their employers making typical contributions.
Saving into a pension, including through salary sacrifice, remains highly tax advantageous. The Government continues to provide over £70 billion of income tax and NICs relief on pension contributions each year.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government what assessment they have made of the consistency of current policy to count the Pension Protection Fund (PPF) reserves towards the Public Sector Net Fiscal Liability with the statutory purposes of the Pensions Act 2004; and whether they have sought legal advice on whether treating PPF assets as part of the public sector balance sheet for fiscal rule purposes is compatible with the statutory framework.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
The Office for National Statistics (ONE) is the independent body responsible for economic classification decisions in the UK. Following international statistical guidance, the ONS has classified the PPF as a public pension fund, while the levies to fund the PPF are classified as taxes.
The way the PPF Board’s assets and liabilities are treated within the public finances does not affect the legal separation of the property of the Crown and Board as set out in the Pensions Act 2004.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government what representations they have made, if any, to the Office for National Statistics about the classification of Pension Protection Fund assets.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
The Office for National Statistics (ONE) is the independent body responsible for economic classification decisions in the UK. Following international statistical guidance, the ONS has classified the PPF as a public pension fund, while the levies to fund the PPF are classified as taxes.
The way the PPF Board’s assets and liabilities are treated within the public finances does not affect the legal separation of the property of the Crown and Board as set out in the Pensions Act 2004.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government what communication they have had with the Pension Protection Fund and its board about the levels of surplus or excess reserves and use of these excess assets for enhancing member compensation payments.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
The Pension Protection Fund (PPF) is a statutory public corporation, and the Department for Work and Pensions works closely with PPF and its Board across a broad range of topics, including member compensation levels and PPF reserves.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government what assurances and risk warnings were provided to members of the Atomic Energy Authority public sector pension scheme in 1996, before they transferred their accrued public sector pension benefits into the Atomic Energy Authority Technology private sector scheme.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
The Department for Work and Pensions does not hold information on how much funding was transferred to the Atomic Energy Authority Technology private sector pension scheme in 1996 and does not hold all the communications that were provided to members of the Atomic Energy Authority Technology pension scheme in 1996.
Asked by: Baroness Altmann (Non-affiliated - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government how much money was transferred to the Atomic Energy Authority Technology pension scheme in 1996, when staff were transferred from their Atomic Energy Authority public sector pension scheme into the Atomic Energy Authority Technology scheme.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
The Department for Work and Pensions does not hold information on how much funding was transferred to the Atomic Energy Authority Technology private sector pension scheme in 1996 and does not hold all the communications that were provided to members of the Atomic Energy Authority Technology pension scheme in 1996.