By Cecilia Valente

LONDON (Reuters) - Local government pension schemes are concerned that legislation in place to guide their investment strategies is proving damaging, according to poll data.

A survey of schemes in England, Wales and Scotland holding 107 billion pounds in local authority pension assets has found 52 percent think current legislation is "detrimental" to efficient portfolio management. Some 57 percent said it limits their access to risk management strategies.

Just over half of the sample finds that the current set of regulation "prevents access to risk/reward opportunities".

The survey results were revealed at the Local Government Pension Investment conference 2008 by Peter Scales, chairman of the Pensions Panel Working Group of the Chartered Institute of Public Finance and Accountancy (CIPFA).

The group was created to investigate current investment regulations for local government pension schemes. It is expected to publish a final report by the end of the year which will feed into a government review considering whether there is a case for changing the rules.

Under the current regime, local government pension schemes face restrictions on the kinds of investments they can make and on which fund managers they can employ to manage the assets.

Pension funds have been badly burned by slumping markets over the past year and even before the credit crisis were seeking ever more diversification of assets in a bid to spread their risk.

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