The report also criticises local governance of the scheme for not challenging managers over poor asset performance and excessive costs which the report fears signals a “dangerous cocktail of incompetent amateurism, indifference, inertia, and an abject lack of curiosity”.
Instead, the report calls for a “dramatic” simplification of the LGPS, removing the local level of governance and give each of the 89 funds an independent governance committee who could monitor performance.
Concluding, the CPS report claimed there had been “ineffective and inefficient governance” of the LGPS, which left it vulnerable to being taken advantage of.
The report said: “Consequently, poor asset performance and excessive costs have not been challenged, and some service providers, notably within the fund management industry, have taken advantage of the LGPS.
“They have, over many years, been iniquitously undermining the long-term sustainability of the scheme. It is the membership, and other taxpayers, who will have to pay the price.”
