Hymans Robertson releases latest LGPS National Knowledge Assessment (NKA)

The governance knowledge of LGPS leaders has increased significantly from 67% to 77% since Hymans Robertson last undertook its assessment of LGPS knowledge in 2022. This is an encouraging sign, claims the firm, given the continual regulatory focus in this area. This latest review, the 2024 National Knowledge Assessment, was the largest to date, with 22 Funds and over 250 members participating.

The NKA provides an opportunity for LGPS Funds to assess the knowledge levels of their Committee and Board members, benchmarked against other participating LGPS Funds. It covers eight topics, including financial markets, investment performance, and pensions governance and administration.

Knowledge of pensions governance, along with Committee Role and legislation, were found to be the two highest scoring sections (77%). Next was investment performance and risk management (74%). Since the 2022 assessment, the average overall score has increased by 11% and knowledge levels are up in five of the eight topics assessed. The results also show that the Board outscored the Committee in all eight areas covered by the NKA – a consistent trend across previous assessments. Analysis of the results also shows that experience matters; scores increased with the length of service completed by the member.

Commenting on the increased governance knowledge of Boards and Committees at LGPS Funds, Alan Johnson, Governance Consultant, Hymans Robertson, says: “Given the importance placed on governance and decision making in the Pensions Regulator’s General Code of Practice released in 2024, it’s reassuring to see this reflected in the high NKA scores in these areas.

“At the other end of the spectrum, it’s perhaps unsurprising to see ‘Actuarial Methods’ as the lowest scoring topic. It has been two years since the last valuation exercise. With the actuarial valuations for English and Welsh Funds commencing this year, we would expect an increased awareness and focus on this subject during upcoming Committee and Board meetings. Scottish funds will be doing their next valuations in 2026, so we would anticipate a similar focus in the lead up to that valuation.”

Commenting on the next steps for LGPS Funds, Alan adds: “While the NKA looks at the aggregate position of the 22 Funds who took part, significant value lies in the Fund-specific results. These allows Funds to tailor their training plans and strategies. The most important step for Funds is to ensure they have a detailed, manageable training plan in place for their Committees and Boards. We recommend that individual learning is tracked, for example noting attendance in each session. A good training strategy and plan will build a stronger base of knowledge within Committees and Boards.

“Another important consideration for Funds moving forwards is to assess which tools they have available – and ensuring they utilise a wide variety of training collateral. This will help to keep members engaged and focussed. Consistently assessing the engagement and training strategy will help Funds build on their knowledge which has increased over the past two years.”