This week, public pension schemes across the UK will be making their submissions to local government minister Brandon Lewis's call for evidence into the future of the Local Government Pension Scheme (LGPS).

Most taxpayers would not realise it, but this process is of paramount importance, not just for public sector employees, but for the public at large.

The background is that there is desperate need for change in the LGPS, which – according to research from KPMG – has a combined deficit of more than £80bn against assets of £150bn.

It is, of course, not alone; almost all pension funds are facing enormous challenges at the moment.  This is due in part to improvements in healthcare and life expectancy, as well as to demographic factors, now that the ‘baby boom' generation is reaching retirement.

This is reducing the working age population as those reaching retirement rise in number.

These factors were thrown into sharp relief by LCP's recent Accounting for Pensions report.

This study, which looked at the pension schemes of the FTSE 100 companies, found that rising life expectancy has added £40bn to liabilities over the last eight years.

The average FTSE 100 pension scheme's assets today can cover 91% of its liabilities; 20 years ago, that figure was 120% and some companies even had the luxury of things like contribution ‘holidays'.

Today, the picture is very different, and what we must now focus on is a solution to the LGPS deficit.

Without it, the fallout will affect us all; deficits will need to be plugged, most likely through increased taxes or higher government borrowing.  As such, the minister's call for evidence comes not a moment too soon.  It is clear that we must find a way of collaborating to help solve this problem.

At the LPFA, we already take part in a vast array of initiatives designed to increase knowledge within the pensions industry.

We work with 23 different local authorities, sharing our expertise and providing a range of pensions administration and communications services; we provide training and development to staff and employers to ensure they are fully versed in the LGPS – including tools available through our website, newsletters and regular seminars.

We also work with the LGA on a number of initiatives, such as videos and modelers, to improve individuals' access to information on their pension.

This month, we held our latest Fund Members Forum, which was led by our deputy chairman, Sir Merrick Cockell and was attended by almost 500 members.

They were interested to hear about changes to the LGPS 2014 and how we can work towards achieving a sustainable LGPS that will look after the pensions of local government employees.

I am delighted that the LPFA was recently honoured for its efforts in the governance field, winning a Best Trustee Training Initiative award.

In addition to these vital collaborative initiatives in which we can all participate, there are a great deal of other benefits that come from working as part of a wider group towards a common goal.

Shared resources will enable us to invest more time and energy into the effective management of our liabilities – a complex area – but one which is nonetheless crucial to ensuring we are able to provide for our pension-holders.

The ultimate objective of pension scheme investing is to ensure that there are sufficient funds to pay the liabilities.  That is why assets and liabilities must be run together, with assets falling more slowly than liabilities over time.

This is easier said than done, but with a greater emphasis on collaboration, LGPS funds could have better access to strategies such as liability-driven investment (LDI), which puts this objective at the heart of a scheme's investment strategy.

LDI solutions aim to reduce balance sheet risk – including equity risk, inflation risk, interest rate risk, longevity risk, and so on – by investing in assets that provide a closer match to a pension scheme's liabilities.

This can significantly reduce the volatility of a scheme's funding position and thereby reduce risk – the key metric being risk-adjusted return.

On top of this, a closer working relationship could give us all access to improved resources across fund administration, communication, governance, data cleansing, and many other areas.

What is encouraging is that we are now seeing more LGPS funds opening up to the idea of working more closely together.

This is a trend we fully expect to continue as a growing number of organisations tap into the benefits of knowledge-sharing.  It is my firm belief that we can only improve our skills and abilities through the sharing of experience and expertise, so I welcome this development wholeheartedly.

I also hope that the call for evidence does not become a missed opportunity for our millions of pension- holders and that the minister – while acknowledging the excellent collaboration currently under way – capitalises on this chance to ensure that the LGPS is empowered to provide public sector pensions for generations to come.

Susan Martin is interim CEO of the LPFA, a PPMA board member and its lead on pensions