Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government what changes they plan to make to local government pension scheme guidance relating to investment allocations, including how they consider fiduciary duty obligations when implementing responsible investment strategies.

Administering Authorities in the Local Government Pension Scheme will be required to set an investment strategy for their fund that must include a high-level objective on responsible investment and a strategic asset allocation completed according to a template to be published in guidance. The intended template for the strategic asset allocation is published here (attached). The choice of allocation and tolerance range for each asset class is for the Administering Authority to make, in line with their fiduciary duty to scheme members and employers. Administering Authorities may choose to delegate completion of the template to their asset pool company.

Pools will be required to deliver the investment strategy set by their partner funds, including the objective on responsible investment. In order to maximise the benefits of scale, the government expects partner funds and pools to work together to develop a common approach as far as possible. The government considers that this provides sufficient flexibility to allow funds to meet their fiduciary duty.