IP fragmentation comes into picture when a sender node(router) in the network sends IP packets without having knowledge of capability of another nodes (routers) in the IP network. In the LTE network, operator avoid the possibility of IP fragmentation in their network. IP fragmentation can introduce un-necessary delay for services used by UE through LTE network.
PGW in the LTE networks, is the node facing towards the external world should take care of this problem by using the standard solution provided by IETF for resolving IP fragmentation problem.