The Local Government Pension Scheme (Management and Investment of Funds) (Scotland) Regulations 2010

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations consolidate the Local Government Pension Scheme (Management and Investment of Funds) (Scotland) Regulations 1998 as amended. In addition to minor and drafting changes, the following changes of substance have been made.

Regulation 3(4) (definition of “investment”) provides that the use of pension fund money for any purpose for which the local authority may borrow money shall count as an investment for the purposes of these Regulations prior to 1st April 2011, after which it will cease to count as an investment.

Regulation 5 (power to borrow) sets out the circumstances in which the administering authority may borrow money for the purposes of its pension fund and the rules applying to the repayment of any such borrowing.

Regulation 6 (separate bank account) provides that pension fund money must, by 1st April 2011, be kept in a separate bank account held by the administering authority for that purpose.

Other provisions provide for: general definitions (regulation 2), what counts as an investment (regulation 3), the sums which an administering authority must pay to and pay from its pension fund (regulation 4), the power to appoint an investment manager including the terms of such appointment and the requirement to keep the performance of any such manager under review (regulations 7 to 10), general provisions concerning investments including the requirement to prepare and maintain an investment policy (regulation 11), the requirement to prepare, maintain and publish a statement of investment principles (regulation 12), the limits which apply to certain types of investments and the requirements which apply if such limits are to be increased (regulations 14 and 15) and the requirement to pay interest on fund money used by the administering authority (regulation 16). Schedule 2 makes consequential amendments and Schedule 3 revokes the enactments which these Regulations replace.

Tables of Derivations and Destinations have been prepared identifying individual regulations in these Regulations with the equivalent provisions in the superseded Regulations and vice versa. Copies of the Tables may be obtained from David Lauder, Scottish Public Pensions Agency, 7 Tweedside Park, Galashiels, TD1 3TE. The Tables have been prepared to assist readers of these Regulations and do not have any legal effect.