Why does Equality, Diversity and Inclusion matter to the LGPS?

How can you be sure your pensions committee and local pension board are equipped to meet the needs of your members and employers? 

There are many factors to consider, but one you should definitely incorporate is equality, diversity and inclusion (EDI), which promotes respect, understanding, and collaboration. It can also enhance LGPS governance and lead to better outcomes for stakeholders. 

Below, I explore the key elements of driving adoption of EDI in LGPS funds:

Governance and stakeholder communication is key to driving results

The LGPS has over 18 thousand employers and six million members who provide, or provided, a whole range of services to local communities. The funds exist to provide pension and protection benefits to those members as a valuable part of their remuneration package. Effective communication with members and employers is essential, so administering authorities should ensure their communication with key stakeholders is accessible, inclusive and easy to understand.

The complexity of the scheme and ongoing developments, for example, the McCloud remedy and pension dashboards further reinforces the importance of effective communication. We encourage administering authorities to actively consider how they will meet the diverse needs of stakeholders when developing and implementing their communication strategy.

Some funds will have in-house expertise, but others will need support. In response to demand from LGPS funds, we’re proud to offer the services of BW’s DrumRoll – our creative communications team who are dedicated experts in creating engaging communications (both member and employer).

EDI training will lead to better decision-making and governance

Key decision-makers in the LGPS, including pension committees and the local pension boards who support them, are not typically pensions professionals. The government's recent proposal to extend training requirements to committees, alongside boards, is a vital step toward levelling up governance standards in the LGPS. However, ensuring training is effective is crucial for well-informed and effective decision-making.

Administering authorities should prioritise training outcomes by offering diverse delivery methods to suit different learning styles and preferences. This will prevent training attendance becoming a tick box exercise and empower funds to better serve their stakeholders through more thoughtful, well-informed decisions.  

At BW, we have developed a suite of online videos which can be accessed on demand via our Enlighten platform to support pension boards and committees. However, these need to be supplemented by ‘live’ training (online or in person) which can be topic-based, fund-specific or generic, where attendees can ask questions to help cement their knowledge and understanding.

Well-governed funds already have a comprehensive training plan and knowledge and skills policy, and there are plenty of offerings out there for funds who want to catch up.

It’s also true that a diverse and inclusive governing body brings varied perspectives, leading to stronger decision-making and governance. While funds have limited control over pension committee appointments, EDI principles can and should guide local pension board selections. Embracing diversity attracts better candidates, keeps board members engaged, and enhances governance.

It's a legal requirement

Administering authorities are subject to the Equality Act and many will have EDI policies whose principles are relevant for the fund. As the Local Government Association (LGA) website so aptly puts it, ‘Employing and engaging with people who have a range of different backgrounds, experiences and ideas increases creativity and leads to better problem-solving and decision-making. Put simply, fairer organisations perform better.’ These principles apply equally to in-house pension teams, and administering authorities should develop fund-specific EDI policies to ensure they are applying the principles in a pension fund context.  

The Pensions Regulator has also issued detailed EDI guidance for pension fund governing bodies, including LGPS funds. While some aspects - such as guidance on committee chairs and appointments - may not directly translate to the LGPS, that doesn’t mean administering authorities cannot take meaningful steps to strengthen governance through EDI. For example, the Scheme Advisory Board is currently exploring opt-out trends.

Enhances member engagement and retention

We can’t prejudge the outcome of the work on opt-outs, but there may be themes that emerge which highlight that there are certain groups who aren’t engaging with the scheme and so are missing out on very valuable benefits. Whilst some of the learnings may well fall to scheme employers, have you considered how integrating EDI into your communication strategy could help better inform members about the value of staying in the fund?

Where are you on your EDI journey?

If you’ve answered no to one or more of these statements (or if you don’t know), it’s time to put EDI on your priority list. Have a look at the next steps below and agree how you will move forward.

Where do you go from here?

How you approach EDI isn’t an ‘off-the-shelf’ solution, so it’s okay not to always know the answer.

If you feel you need to start putting EDI higher up on your agenda, start with an open conversation about how you will approach this. Get input from the scheme manager - the administering authority may already have a clear strategy that can be used as a starting point.

You may also want to arrange facilitated training. This will allow you to explore your views, beliefs and determine priorities, ensuring you determine the right approach for your fund.