DCLG green lights £36bn Border to Coast LGPS pool
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The government has approved plans for the largest proposed pool of Local Government Pension Scheme funds.
The £36bn Border to Coast Pensions Partnership received a green light from the Department for Communities and Local Government (DCLG) in a letter last week.
The news comes after Room151 last month revealed the first two pools to receive approval: LGPS Central, covering nine Midlands-based funds, and a group representing Welsh local authorities.
Phil Triggs, strategic finance manager of pensions and treasury at Surrey County Council — part of the Border to Coast group — told Room151: “The submission we made was pretty much in line with government’s expectations and ambitions, and they have given us the green light.
“Work will now commence on putting into place the arrangements we need.”
He said he was confident that Border to Coast would be in a position to begin pooling in time for the proposed implementation of new arrangements in April 2018.
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The Border to Coast pool, with combined assets of £36bn, is made up of 13 LGPS funds in Bedfordshire, Cumbria, Durham, East Riding, Lincolnshire, North Yorkshire, Northumberland, South Yorkshire, South Yorkshire Transport Fund, Surrey, Teesside, Tyne and Wear and Warwickshire.
In its proposal to government, the pool said it would undertake internal management on sub-funds covering UK equities, regional overseas equities, UK fixed income and overseas fixed income.
It would also award external mandates in these categories along with global equities, diversified growth funds, passive equities and fixed income, plus alternative investments.
Border to Coast expects pooling to save £29m a year in fees by 2033.
LGPS Central has wasted no time in launching a tender for an external service provider following its approval. The pool is seeking a partner to undertake depositary and custody, registrar, transfer agency and administration services.
The contract would be expected to start in June 2017 and run until November 2028.
In a separate development, pensions advisor Hymans Robertson — which played a leading role in helping authorities prepare LGPS submissions — has announced a shake-up within its public sector consulting team.
Barry McKay becomes head of LGPS actuarial, working alongside David Walker as head of LGPS investment and Ian Colvin as head of benefits consulting.
John Wright, head of public sector, will continue to focus on client liaison, and retain oversight of the delivery of actuarial, investment and benefits services.
Wright said: “We have been working towards this model for some time, with a gradual transitioning of client responsibilities.
“So, I have been able to focus on helping our clients navigate the ever-increasing array of changes and challenges in public sector pensions.
“The government’s initiative to encourage schemes to pool investments is just one example.”
