The Local Government Pension Scheme is what’s called a ‘defined benefit’ pension. The benefits you receive are set out in the rules of the scheme and are determined by a set calculation. This means you have a defined pension promise regardless of the performance of GMPF investments.
Looking after your pension well and being a responsible investor is really important to us. We strive to make decisions and create policies that reflect our commitment to investing in the best interests of all our stakeholders and wider society. We know that many of you are interested in how we do this because poor performance can affect the employers who are part of our Fund, tax payers and the future pension promises of others. This responsibility is known as stewardship.
Last year GMPF was one of the first funds to be approved as a signatory to the Financial Reporting Council’s UK Stewardship Code 2020. This code sets high standards for those investing and looking after money on behalf of UK savers and pensioners. GMPF had to demonstrate how it applied the Stewardship Code’s standards and underwent a rigorous review process that included submitting evidence of its stewardship activities. GMPF was one of only 23 asset owners to successfully complete this process and be approved as a signatory, which is a significant endorsement of its responsible investment and decision making processes.
As we approach a funding level of 30 billion UK pounds, we are pleased to report that our work in this area goes from strength to strength. In November 2021, the 2021 RAAI Leaders List of the 30 most responsible asset allocators ranked GMPF as 35 in the world of most responsible investors. This was out of a group of the top 634 asset allocators across 98 countries with 36 trillion US dollars in assets. We scored an impressive 96 out of a potential 100 to achieve this rating, and we continue to strive to be a top leader in the area of pension fund stewardship. You can read more about what we are doing to ensure low cost, sustainable and responsible pensions on the How does GMPF invest? page of our website.
We are also pleased to report that our governance, administration and communication services continue to be recognised as some of the best in the UK and across Europe, with GMPF recently being awarded the Pension Fund Communication Award at the European Pension Awards in October 2021. Visit the Looking after members’ pension page on our website to find out more about how we administer your pension.