Conflicts of Interest
At LPF, we're committed to acting in the best interests of our stakeholders, ensuring the highest standards of integrity and transparency in managing pension assets and delivering services. This duty includes our responsibilities as both a pension fund and where applicable, an investment manager.
- As a pension fund, we have a fiduciary duty to act in the best interests of our pension stakeholders, including members, beneficiaries and scheme employers
- As an investment manager, LPFI has a duty to act fairly, paying due regard to the interests of our LGPS clients and treating them with fairness and integrity.
Identifying and managing conflicts of interest is a vital part of ensuring these duties are upheld. We're dedicated to meeting the requirements of The Pensions Regulator (TPR), the Financial Conduct Authority (FCA) and the UK Stewardship Code in our approach to conflicts management.
How We Manage Conflicts of Interest
We take a proactive approach to ensure that potential conflicts are identified, monitored and managed, including:
- Identification: We've processes in place to identify any potential or actual conflicts of interest across all LPF activities, including: decisions made by the governing body, and the administration of the pension fund and investment management. Our team is trained to recognise potential conflicts, whether they arise from financial interests, personal or professional relationships or circumstances involving advisors, third-party service providers or employers
- Disclosure: We require potential or actual conflicts to be disclosed. Our colleagues and members of our governing bodies must declare relevant interest and these disclosures are documented and reviewed regularly
- Decision-Making: We've processes in place to help ensure decisions are made objectively. Where a conflict is identified, steps such as recusal, independent review, legal advice or delegated authority can be used to maintain integrity
- Ongoing Monitoring: Conflicts of interest are monitored and reported regularly to ensure evolving issues are promptly managed
- Training and Awareness: All LPF staff complete regular training on conflicts of interest and adhere to a Code of Conduct, which reinforces their commitment to ethical behaviour and impartiality. Pension Board and Committee members are also subject to specific training requirements and follow their own Pension Board & Committee Code of Conduct to ensure they understand and meet their fiduciary responsibilities
- Adherence to Regulatory Standards: Our approach is designed to meet TPR, FCA and the UK Stewardship Code requirements, ensuring we maintain high standards of governance, stewardship and client care.
Stewardship
As part of our commitment to responsible investing and stewardship, our investment approach is informed by our Statement of Responsible Investment Principles. We also ensure that conflicts that may arise as a result of our investment activities are identified and addressed such as: differing interests between LPF as asset owner and LPFI as asset manager, or differences in voting or stewardship approach with clients or managers. Where potential conflicts arise, they're managed transparently to ensure our decisions are consistent with our fiduciary duty.
Review and Oversight
Our conflicts of interest policy is regularly reviewed to ensure it remains effective and up-to-date with regulatory standards and best practices. Our governance framework includes monitoring and oversight by our Risk and Compliance team, with regular reporting on conflicts management provided to senior management to maintain transparency and accountability.