Dear Sir/Madam

I enclose a copy of regulations, which the Secretary of State has made under the powers contained in section 7 of the Superannuation Act 1972. The regulations amend the Local Government Pension Scheme (Management and Investment of Funds) Regulations 1998 "the investment regulations". They come into force on 17 October 2000.

Regulation 3 amends "member State" in regulation 3(6)(b) of the investment regulations to "an EEA state".

Regulation 4 or amends paragraphs 6 and 10 of Part I of Schedule 1 to provide that 25% of the fund can be invested in any insurance contract.

Proposed amendments to take on board changes which will be made necessary by the new Financial Service and Markets Act 2000 have been put on hold until the commencement dates for the relevant parts of the Act are available.

The consultation exercise conducted earlier this year sought views on whether there should be a limit of 25% on investments in insurance contracts managed by any one body and a 25% limit on investments managed by the same body in unit trusts, OEICs and insurance contracts. The relatively few responses received on this issue were inconclusive and the issue clearly needs further debate.

The consultation exercise also sought views on the effectiveness and form of the existing regulations and any other issues which could affect the regulations with a view to undertaking a substantive review of the regulations subject to ministers agreement. The intention is to prepare a paper to send out for consultation in October.

Any enquiries about the application of the provisions should be made to Anne Wood, Local Government Pensions Division, DETR, Zone 2/E6, Ashdown House, 123 Victoria Street, London, SW1E 6DE. Telephone enquiries can be made on 020 7944 6013.

 

Yours faithfully