Navigating the Fairway of LGPS Reform

The Ryder Cup, held every two years, sees Team Europe and Team USA go head-to-head in three days of high-stakes golf. But unlike other tournaments, it’s not just about individual brilliance - it’s about teamwork, strategy, and execution. Players have to align their strengths with a shared game plan, which makes it a fitting analogy for the changes taking place across the Local Government Pension Scheme (LGPS) space.

Much like the European team’s journey to victory noted by team captain Luke Donald, LGPS reforms demand foresight, coordination, and a clear understanding of roles and responsibilities to meet the deadline of 31 March 2026 in which all LGPS administering authorities in England and Wales are expected to transition into Financial Conduct Authority (FCA) - regulated investment pools.

The LGPS is not just another defined benefit pension scheme - it’s a cornerstone of public service, supporting millions of members across the UK. Its scale and complexity requires a winning team effort akin to the masterclass demonstrated by Europe’s recent Ryder Cup victory. As the US team may have been asking, what lessons can we take away from their experience?

The Strategic Shift: From Administering Authorities to Investment Pools

At the heart of the reform is a redefinition of roles. Administering authorities are tasked with setting high-level investment strategies, while pools (the consolidation of multiple LGPS funds into collective entities) are expected to take on full execution responsibilities. This includes portfolio construction, manager selection, and ongoing oversight.

This development reflects the fiduciary approach commonly adopted by private sector schemes, where trustees entrust day-to-day investment decisions to specialist fiduciary managers while maintaining overall strategic oversight. The similarities are clear: both models depend on strong governance, defined accountability, and a shared clarity of purpose.

Ryder Cup reflections: everyone was clear on their role for success. 

Local Autonomy vs. Central Efficiency

A prominent tension in LGPS reform is the risk of losing local control. For many authorities, investment decisions have long been shaped by regional priorities, stakeholder values, and tailored funding needs. Pooling, by contrast, may feel more remote introducing a centralised layer that may not reflect the nuances of local context.

However, centralisation need not mean uniformity. With the right governance structures, pools can accommodate local nuances while delivering broader efficiencies. This requires open dialogue, shared frameworks, and a commitment to transparency. Administering authorities must be empowered to influence strategy and hold pools accountable, even as execution becomes more centralised.

Ryder Cup reflections: a good team captain must still recognise the underlying strengths of its players.

Fiduciary Management Oversight: A Blueprint for LGPS Success

LGPS pools are increasingly expected to operate like fiduciary managers, even if not formally recognised as such. Pools must demonstrate investment expertise, operational robustness, and regulatory compliance, particularly under the scrutiny of the FCA. They must also provide transparent reporting and meaningful engagement with administering authorities, ensuring that strategic objectives are not lost in execution.

In our role as independent oversight provider in the fiduciary management space, we see the value in having a fresh pair of eyes to provide collaborative challenge.

Ryder Cup reflections: sometimes bringing in a new coach or conducting a one off specialist lesson can help individuals up their game.

Collaboration: The Heart of Strategic Success

One of the most compelling aspects of Europe’s Ryder Cup triumph was the way individual talents were brought together to form a cohesive, high-performing team. Players from different countries, with distinct playing styles and personalities, united under a shared strategy with a clear goal. This wasn’t just about individual brilliance, it was about trust, communication, and alignment.

This dynamic offers a powerful parallel to the collaborative spirit required within LGPS reform. Administering authorities and pools must now operate in closer partnership than ever before.

Success will hinge on how well they can bring together a range of priorities, funding positions, and governance styles into a single, coherent investment approach.

Pooling is not merely a structural change - it’s a cultural one.

Ryder Cup reflections: a fostered sense of shared mission is crucial.

Driving Net Zero Through LGPS Reform: Embedding ESG at the Core

While the 2026 LGPS reforms will see investment pools take on greater responsibility for implementing ESG-integrated strategies, full accountability for ESG will not be entirely passed on. Administering authorities will still retain strategic oversight and must ensure that their pool’s approach aligns with their own ESG beliefs and fiduciary duties. This shift is expected to enhance consistency and scale in ESG delivery, particularly around climate risk and net zero commitments (our research shows 51% of LGPS funds still lack a formal net zero strategy).

Ryder Cup reflections: while it may be a distant parallel, those who saw Rory McIllroy use his platform as a star player to call out bad behavior, LGPS absolutely have the platform and scale to make impactful changes in the ESG space.

Looking Ahead: Preparing for 2026

The 2026 deadline is fast approaching, and the scale of change required is significant. Success will depend on many factors, but we do believe some golfing lessons can be taken away from the recent success of the European team.

Europe’s Ryder Cup win was not just about talent - it was about preparation, adaptability, and unity. And even then, they only just got over the line. LGPS reforms face a similar challenge: the ambition is clear, but the goal is extensive. Without coordinated effort and timely action, the sector risks scrambling for an eighteenth hole putt as the 2026 deadline looms. For pools, this means getting organised early, being clear about their priorities, and ensuring those priorities aren’t lost in the complexity of implementation. Establishing strong governance and communication with administering authorities will be essential to keep strategic objectives front and centre throughout the transition.