Accounting for Local Government Pension Scheme Management Expenses (2016 Edition)
The cost of administering the Local Government Pension Scheme (LGPS) has come under increasingly intense scrutiny in recent years, culminating in the DCLG Call for Evidence on the future structure of the LGPS. The purpose of this publication is to update the 2014 guidance in the light of practitioners’ experiences to date, and to provide additional practical guidance on some of the more complex areas.
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The CIPFA Pensions Panel has produced this guidance to address the purpose of achieving consistent reporting of data that:
- is comparable from one reporting period to another
- brings the inclusion of detailed reporting of LGPS management costs within the scope of the external audit regime
- provides a sounder basis for comparisons between funds, and
- underpins the future development of more sophisticated performance metrics which take account of fund size, asset allocation and investment and risk strategy.
The 2015/16 Code now requires LGPS management costs to be reported on the face of the Fund Account. It does not in itself mandate further disclosure, but instead recommends that pension fund administering authorities should “have regard” to the CIPFA publication Accounting for Local Government Pension Scheme Management Expenses.
To improve the transparency of LGPS management cost data and facilitate interfund comparison, this guidance requires that funds should also disclose by way of a note to the accounts a breakdown of management costs across the following three categories as a minimum:
- investment management expenses
- administration expenses, and
- oversight and governance expenses.
By leading the way on cost disclosure, LGPS administering authorities will once again be placing themselves at the forefront of best industry practice, with full and transparent cost data available not only to support strategic decision-making across the sector, but also to assess individual administering authority cost-effectiveness.
This publication is only available as an online version.
It has both searchable HTML and a bookmarked downloadable PDF of the publication that can be shared throughout your organisation. Customers will need to register and login to CIPFA’s website to access the publication.
Details of licensing arrangements for other categories of purchaser, which includes those organisations operating shared service arrangements, are available from CIPFA’s Publications Department.
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