Government “open” to SPPA proposals
Author: LAPF Investments | Published: July 31, 2026
The government is open receiving proposals from funds to create Single Purpose Pension Authorities (SPPA), subject to approval.
It comes as part of new guidance for the LGPS from the Ministry of Housing, Communities and Local Government (MHCLG) for how to manage through local government reorganisation (LGR).
Under the most recent round of LGR, a new administering authority may need to be designated for the LGPS as the authority where a fund is based may no longer exist.
According to the guidance, several aspects should be considered when selecting the new authority – including whether it has the capacity to manage a fund with assets and liabilities which may far exceed the operational budget of the host authority.
It must also can meet all legislative governance requirements and demonstrate effective governance arrangements, as well as the ability to participate in the governance of its asset pool.
If a fund is considering moving to an SPPA model, meanwhile, it should take account of whether the fund operates at sufficient scale, what the opportunities for improvement service delivery, and the potential to facilitate future mergers between neighbouring funds – creating larger organisations that can operate at scale.
Any proposals for an SPPA will need to be received by 15 February 2027.
The guidance also emphasises the point that funds will need to give themselves sufficient time to plan and implement the transition, adding that “it is important that decisions about pensions are not left to the last minute and sufficient time is given to understand the implications of different options”.
It went on to say: “We advise fund officers to provide options to the current AA, based on the new unitary structure. This must also take into account the views of any interested stakeholders – such as any funds which have a shared service arrangement with the AA. Employers should be kept informed of the proposals.
“The current AA can then make representations to the department. This will allow the Secretary of State to make a decision in principle, to be agreed by the shadow authorities on their election in May 2027.”
MHCLG officials require information to understand the preferred authority, and your reasoning behind it, to put to the Secretary of State for decision.
This should include:
- The lead proposal, and any alternative options considered. We want to see evidence that this is the best option and the data underpinning it – particularly if making the case for a Single Purpose Pension Authority
- Views of any connected stakeholders
- Costs, benefits and efficiencies of the lead proposal
- Operational risks with the transition to a new AA and how these will be mitigated
- proposed governance arrangements, including the LGPS senior officer and how employers, including other local authorities will be represented
- Consistency with Fit for the Future reforms and proposals, including governance requirements and pool participation
- How the new AA will handle risks, particularly around data protections and cybersecurity
For proposals to move the authority to a unitary authority, there are two possible tracks:
- Where the AA is able to submit a proposal in advance of the election of shadow authorities, these should be received by 1 March 2027
- If the proposal cannot be submitted before the election of the shadow authorities, this must be received by 30 September 2027
A link to the full guidance can be found here.
