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Public Sector Pensions: LGPS Insight – October 2026

22 Oct 2026 8 min read

City Hall and Tower Bridge Landon Mayor Office

Welcome to Public Sector Pensions: LGPS Insight, our newsletter dedicated to recent legal and regulatory developments in the world of public sector pensions, with a particular focus on the Local Government Pension Scheme.

In this edition we bring you the latest progress following the passing of the Pension Schemes Act 2026 into law. As the implementation phase of the LGPS reforms continues in earnest, for many the focus has shifted now from asset pooling to investment strategy and governance changes.

Elsewhere, as local government reorganisation policy continues to evolve, we share our thoughts on MHCLG’s new guidance for administering authorities, as well as key learning points from our recent work with Surrey Pension Fund on establishing its Single Purpose Pension Authority.

We also consider other key governance issues including the latest on the April 2027 changes to inheritance tax and the new data subject complaint regime, as well as the impact of AI on member complaints and updates from the Pensions Ombudsman. And last but not least, we celebrate winning Law Firm of the Year at the 2026 LAPF Investment Awards.

Awards success

We are delighted to have won ‘Law Firm of the Year’ at the 2026 LAPF Investment Awards. This recognises the outstanding achievements of teams across Burges Salmon delivering successful change for the LGPS through this transformational period of reform.

Public Sector pensions work is a key area of our practice which has undergone significant growth and we are proud to see our high-quality legal advice and the successful delivery of complex and innovative projects recognised with this accolade.

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PSA 2026 reforms

Following the passing of the Pension Schemes Act 2026 on 29 April 2026, implementation of the LGPS reforms has continued apace. For an overview of the key developments please see our Pension Schemes Act handbook, which has a dedicated chapter setting out the changes the Act makes to the LGPS, as well as the latest updates on secondary legislation implementing those reforms.

Read the handbook

Since the PSA26 received Royal Assent, two new sets of regulations have been laid, and three new statutory guidance documents have been published.

Please see our June article, highlighting some key aspects of the Local Government Pension Scheme (Pooling, Management and Investment of Funds) Regulations 2026 and the Local Government Pension Schemes (Amendment) (Governance) Regulations 2026, both of which came into force on 30 June 2026.

Investment strategy statement changes

In the first of our three part series on the trio of statutory guidance documents published in June 2026, we focus on investment strategy statements – what does the new guidance say and what actions should administering authorities be taking now to prepare for the March 2027 deadline to publish their first ISS under the new regime?

Local government reorganisation

New guidance for s151 officers

In July MHCLG published new guidance which addresses the impact of the ongoing local government reorganisation programme on administering authorities. Alec Bennett outlines the key considerations for funds to be aware of in this article.

Important update: Please note that since this article was published the Government has announced a review of its local government reorganisation plans. On 25 September the LGPS Scheme Advisory Board (SAB) published a statement confirming that MHCLG has written to administering authorities to advise that in view of the review:

the timelines in the guidance will no longer apply and;
any proposal to change which body would become the administering authority following the reorganisation should be treated as being on hold.
However, although the timeline has been paused the statement advises that the principles set out in the guidance “remain relevant”.

However, although the timeline has been paused the statement advises that the principles set out in the guidance “remain relevant”.

Read the full statement from the SAB

Single purpose pension authorities

One of the options addressed in the new guidance mentioned above is the setting up of a single purpose pension authority. We have recently worked with Surrey Pension Fund to establish its SPPA, the statutory order to implement which came into force on 5 October 2026. The Surrey Pension Fund will vest in the new Surrey Pensions Authority with effect on and from 1 April 2027.

Gary Delderfield was pleased to join Hymans Roberston’s Andrew McKerns and Ian Colvin on a webinar in September to discuss SPPAs in more detail and share some key points for funds considering this type of restructuring to consider.

Watch the webinar

Focus on AI

What do your scheme members expect in relation to AI?

We were delighted to partner with LPPA to survey its member panel about their attitudes to AI. With almost 1,700 responses, the survey provides a valuable insight into both how members are using AI and what they expect from their pension fund.

Callum Duckmanton is delighted to be joining colleagues from the LPPA to deliver a joint session discussing the report’s findings at this year’s South West Councils LGPS Pension Managers’ Conference in November.

AI and member complaints

With use of AI technologies becoming rapidly more widespread, we consider what impact this has on member IDRP complaints. How might stakeholders need to adapt their approach in response?

Our brand new, free “Pensions AI Tool”

We have recently released our “Pensions AI Tool”, which provides an introduction to the opportunities and risks of AI, along with TPR’s expectations and our recommended risk mitigations. To access this, please click here.

AI is an active area at the moment especially for public service pension schemes. Please do get in touch with us if it would be useful to discuss, including about how we can assist with training or governance policies.

Governance

Thought leadership

New data subject complaints regime: what pension scheme trustees need to know

2 April 2026

Thought leadership

Further Update on Inheritance Tax Reforms: what do those running pension schemes need to know

7 September 2026

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Pension Disputes

McCloud remedy: an update from the Pensions Ombudsman

The Pensions Ombudsman has published an updated version of its guidance on how it will approach member complaints relating to application of the McCloud remedy. Alec Bennett draws out what schemes need to know in this update:

Pensions Ombudsman – overpayments information sheet

The Pensions Ombudsman has published a factsheet – “Pension Overpayments: Information for members”. The publication is designed to explain to members what an overpayment is, the obligations in relation to repaying overpaid monies and the potential legal defences that may exist for members in specific situations. It also covers when and how TPO can help if there is a dispute that cannot be resolved.

TPO is encouraging schemes to share the factsheet with members, ideally at the early stage when the member is informed that an overpayment has been made. It should also be provided when a member queries or disputes a scheme’s attempt to recoup an overpayment. The aim is that the information “supports both parties to work together to agree whether, how and over what period an overpayment should be recovered”.

Pension Bites

TUPE reforms – a call for evidence

On 1 July the Government’s call for evidence on the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations 2014 closed.

The exercise, which began under the Starmer government, was part of the Government’s Plan to Make Work Pay policy, which formed part of its manifesto and which has already led to significant employment law reforms, spearheaded by the Employment Rights Act 2025. The Plan to Make Work Pay committed to strengthening TUPE regulations and the then Government said that the call for evidence will inform development of policy options for their reform.

From the pensions perspective, the call for evidence invited views on whether employee pension rights are sufficiently protected under a TUPE transfer. This is of course a particular issue in the public sector, where the more generous public sector defined benefit pension entitlements are largely excluded from TUPE protection on transfer to a private sector contractor, which would typically offer a less generous defined contribution arrangement.

Of course, for some public sector workers, New Fair Deal policy and the Best Value Direction operate to ensure that transferring staff have continued to access to their existing public service pension arrangements. As we reported in December 2025, the Government has consulted on reforms to implement New Fair Deal policy into the LGPS and we await the outcome of that consultation.