The latest LGPS National Knowledge Assessment (NKA) 2022 undertaken by Hymans Robertson, has shown high levels of engagement and good levels of knowledge amongst participating funds. The leading pensions and financial services consultancy‘s national assessment helps funds benchmark the knowledge and understanding of their Pension Committee and Board members. Encouragingly, nearly three-quarters (73%) of eligible participants completed the assessment (compared with 61% in 2020).

The results of the assessment showed that Chairperson knowledge levels remain high with an average score of 68% in comparison with the average participant score of 53%. This highlights that those that lead many of the discussions, and decision-making processes at funds, have a strong level of knowledge and skill. It also found an increased level of knowledge in areas, such as Administration, Governance and Actuarial methods, standards and practice, when compared with the 2020 assessment. Levels of understanding of topics that have traditionally been the focus of committees – such as investment - have reduced in the same period.

Commenting on the importance of engagement by LGPS funds with the NKA assessment, Andrew McKerns, Senior LGPS Governance, Administration & Projects Consultant, says:

“This marked increase in engagement with the NKA indicates an appetite for understanding current knowledge levels at LGPS funds and demonstrates a continued commitment to learning. Engagement is a key component for informed decision making. Maintaining knowledge from all members is also a vital aspect of funds governance requirements. As part of our analysis, we are able to provide funds with an overview of the levels of engagement from both their Committee and Pension Board. Ultimately, knowledge without the engagement would not provide the full picture.

“It’s really encouraging to see such high levels of knowledge demonstrated by funds of all sizes, especially at Chair level. Yet, there is still room for it to increase even higher through continued training. Participating in the assessment helps funds gauge whether training is successful, particularly as many continue to promote their newly developed hybrid training programs, which have been developed to suit a post-pandemic way of working.

“The past two years have brought many new members to Pension Committees, and it’s important that they fully understand their role and are engaged with the responsibility they have to scrutinise LGPS requirements. Since the previous NKA the LGPS, just like the wider pension industry, has been going through a period of significant change. This year’s assessment was undertaken against a backdrop of The Pensions Regulator’s (TPR) upcoming single Code of Practice, the England and Wales Scheme Advisory Board’s (SAB) Good Governance recommendations, and increased expectations as the LGPS landscape continues to transform at pace. The broadening of the topics that Pension Committee and Board members have had to address inevitably leads to increased pressure on funds.”

Commenting on the key takeaways from this year’s NKA, Andrew, continued:

“This year’s NKA is the first post-pandemic national assessment to take place in the LGPS and reflects the fundamental changes that have taken place in both the pensions, and wider world, at large. The pandemic has led to new ways of working, not least a huge growth in online tools, with training adapted to reflect a hybrid way of working. Our assessment shows that the strides made during this exceptional time have had a positive impact with training more interactive and tailored than ever before.

“As we’d hoped, the results of this assessment clearly highlight that an engaged Committee and Board are more likely to keep up to date with developments and key issues within the LGPS. Our response rates have significantly increased in less than two years, and we would encourage funds to take advantage of this increase, through the promotion and provision of different training methods to meet the variety of needs and styles of their members.”