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Seven town hall pension funds with a combined £45bn of assets will combine their investments with one of the UK’s largest local pension managers, as part of the government’s push to consolidate the assets of the UK’s sprawling Local Government Pension Scheme (LGPS).
Border to Coast, which manages £65bn of assets, said on Monday it was in “exclusive discussions” with funds in Cambridgeshire, East Sussex, Essex, Hertfordshire, Kent, Northamptonshire and West Sussex to form a partnership that would take its pool of assets to £110bn.
Pensions minister Torsten Bell and local government minister Jim McMahon wrote in April to two of the eight LGPS pools — ACCESS and Brunel — saying their business plan did not meet their vision for the future of LGPS, and told the 21 underlying funds impacted they must notify ministers which of the remaining six pools they planned to merge with by the end of September.
The move is part of the government’s plans to boost economic growth by consolidating pension assets, but has sparked controversy among some of the people running the pools who say the process has been rushed and warn against the costs associated with forcing mergers.
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Border to Coast joint committee chair George Jabbour said he was “really pleased” that the funds had signalled their intent to join the pool “as they share our values of collaboration, with a focus on openness”.
Councillor Jeremy Hunt of West Sussex Pension Fund said Border to Coast “offers a strong governance framework and a collaborative approach”.
ACCESS and Brunel’s administering authorities have been told they must choose which of the remaining pools they will partner with by the end of September, and assets must have transferred to their new partner pool by the end of March next year.
The seven funds that plan to move to Border to Coast are currently part of the ACCESS pool, which has a total of 11 administering authorities.
Last month the Wiltshire Pension fund, part of the Brunel pool, announced it planned to partner with LGPS central pool.
Data visualisation by Toby Nangle
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