History of the LPFA
The LPFA was established as a stand-alone public body on 31 October 1989, when all the functions, property, rights and liabilities of the London Residuary Body in relation to the Greater London Council’s Superannuation Fund were transferred to the LPFA.
Since then, the LPFA has developed into an award-winning LGPS fund, recognised for its thought leadership in reforming the Local Government Pension Scheme, its innovation and excellence across the spectrum of asset management and investment and pension administration. LPFA has lead the way in driving reform of the LGPS sector and embracing new ways of doing things, whether in investments or administration.
The next stage in LPFA’s evolution and journey came in 2015 when it announced its collaboration with the Lancashire Country Pension Fund (LCPF) with the intention to form a £10bn Asset and Liability Management (ALM) Partnership. LPFA's Strategic Policy Statement sets our rationale for taking this step in much more detail; download the document from here.
More on the history of LPFA
The Asset and Liability Management (ALM) approach focuses on providing a range of services to assist partner funds to manage their assets and liabilities (risk) together, so that they can plan their cash flows and determine the returns required from their assets on an accurate and timely basis. Each fund retains the flexibility to maximise investments on return-seeking assets to close their respective deficit, whilst meeting their cash flow requirements by investing in cash-flow-generating assets intelligently.
The partnership, known as the Local Pensions Partnership Ltd (LPP) went live in April 2016, when LPP received Financial Conduct Authority (FCA) authorisation, enabling LPFA and LCPF to start pooled management of their assets and to benefit from the cost and other economies of scale that pooled management offers. Investment staff from both LPFA and LCPF transferred into a new investment team within LPP. At the same time, LPFA and LCPF began the integration of their pension administration service, with administration staff also transferring to LPP. LPP now provides pension administration services on LPFA’s behalf. As a not-for-profit organisation, LPP’s drive is to achieve economies of scale and efficiencies for the benefit of members, employers, partner funds and customers, rather than profits for shareholders, without compromising on service quality. The values and behavious that characterised LPFA have carried forward to LPP and are just as important in the new organisation. We are committed to achieving our strategic goals by being the best for our people and stakeholders, delivering results, acting with integrity and making sure that all our stakeholders matter. More information on LPP can be downloaded from its website.
At an individual fund level, both LPFA and LCPF retain their respective fund’s discrete senior management and other governance structures (e.g. Pension Committee / Pension Board). This ensures that the individual fund retains their local accountability, keeps control of strategic decisions such as employer contribution rates, strategic asset allocation and setting risk appetite. The sovereignty of all pension fund partners is also maintained.