Local Government Pension Schemes
Although a relatively new consideration in the Local Government Pension Scheme (‘LGPS’) context, understanding the employer covenant as part of the 2019 valuations will be an essential part of demonstrating good governance for LGPS schemes.
In our extensive experience of advising multi-employer schemes, a core concern is that each employer should pay its own share of liabilities, even though the rules of the scheme may allow for liabilities to be shared. What each employer will need to contribute will therefore be based on the covenant it can provide to the fund.
In addition, given the constraints on public finances, and the knock-on impact this is having on local service providers, it is more important than ever that administering authorities adopt a funding approach which is appropriate to each sponsor and factors in their own financial constraints.
Finally, we have extensive experience of providing advice in relation to specific corporate transactions, such as college mergers. In such situations, it is usually the case that the event will need to result in a demonstrably better outcome for the fund, and we excel in explaining the impact of complicated transactions on the employer covenant.