Local Government Pensions Scheme in England and Wales - Scheme Improvements (Access and Protections)
Proposal 2: Process for applications where criteria are not met
44. For situations where the criteria are not met, the government proposes that applications to the Secretary of State will continue to be required. Based on recent applications for directions, this would most likely be situations where the current administering authority does not agree to the transfer.
45. The government supports applications for directions to consolidate within a single administering authority, where analysis shows that benefits clearly outweigh the costs in a particular case. The government wishes to avoid that an administering authority can veto otherwise sensible consolidation. Whilst government understands that no administering authority wants to lose the active members, it is for government to arbitrate in cases where local agreement cannot be reached.
46. Some administering authorities have raised cashflow as a potential issue. Losing active members as a result of a direction would mean fewer contributions coming in. The government would consider this on a case-by-case basis and consider evidence of significant adverse cashflow impacts.
47. We also recognise that there are many practical considerations were such a direction application to be approved, such as the transfer of assets or member records. Government expects to see robust evidence against the criterion that the receiving fund must be able to administer the transfer effectively.