Recently I have used my regular column to discuss collaboration and reform in the Local Government Pension Scheme (LGPS), primarily with a focus on the asset side. However, this is only one side of the coin.

With the Pension Regulator requirements for public pension schemes effective from 1 April and the ongoing work by the Shadow Pensions Board on deficit reduction, managing employer risk in the LGPS is a key issue that all schemes need to address.

In the event of employer failure, liabilities fall on other employers in an LGPS scheme fund and therefore taxpayers. Ultimately, it must be the key requirement of all public sector funds to protect the taxpayer and mitigate against employer default.

The risk of this can be mitigated in a number of ways.