Investment pooling

The Local Government Pension Scheme in England and Wales is managed through 91 funds with combined assets of over £200bn, making it one of the largest funded pension schemes in Europe. In the summer 2015 Budget, the UK Government asked LGPS funds to put forward proposals to pool investments to significantly reduce costs, whilst maintaining overall investment performance.


As the administering authority for Derbyshire Pension Fund, Derbyshire County Council investigated the pooling options available to the fund, and determined that the fund's best interests would be served by forming an investment pool with several other Midlands based LGPS funds. In December 2015, Derbyshire Pension Fund announced its intention to create a pool with the pension funds of Cheshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands, the West Midlands Integrated Transport Authority and Worcestershire.

The LGPS Central investment pool, with assets under management of approximately £34bn, will aim to be a regional centre of excellence in investment management, building on the successful low cost internal investment management capabilities of participating funds and using its size to drive increased value for money from external providers.

Following the submission of its business case to the Government in July 2016, the pool is now working hard to implement its proposals, ahead of a launch date of April 2018. In the meantime, the participating funds are collaborating to share best practice whilst aiming to drive cost savings ahead of pooling.

Based on the July 2016 Government submissions, there are likely to be eight investment pools encompassing the 91 LGPS funds.

Members

The pooling of investments will have no effect your benefits. The LGPS is a defined benefit scheme which means that your pension benefits are based on your salary and how long you have been a member of the LGPS. The pension benefits you receive are not linked to investment returns.

Further information

The Local Government Association has prepared question and answer guides for both employees and employers on investment pooling. They are attached to this page.

Related documents

The following documents are in Portable Document Format (PDF). You can download software to view PDF documents for free from the Adobe website (opens in a new window)