Latest Public Sector News

05.08.16

Wandsworth and Richmond open consultation on pension fund merger

Wandsworth and Richmond Upon Thames local authorities are proposing merging their pension funds as part of a cost-saving measure.

The two London boroughs announced in January 2015 that they were planning to enter shared staffing arrangements, with an aim of achieving £10m savings.

They now argue that one fund under one administering authority is needed to enable appropriate cost allocations and financial accountability for the pensions of staff under the shared staffing arrangements.

Under the merger, all the assets and liabilities owned by Richmond’s pension fund and any associated responsibilities will transfer to Wandsworth.

Pension costs that accrue from staff service under the shared services arrangements will fall to the borough which commissioned that service.

Alternative solutions include maintaining the separate funds or allocating the staff employed under the shared staffing arrangements to one or another of the shared funds.

However, the two councils said: “The merged fund approach benefits from producing outcomes which would be legal from an accounting and actuarial perspective and avoid any risks of challenge to each authorities’ annual accounts.

“Any other approach lacks legal certainty and creates risks and insurmountable overheads that mean we do not believe that there is any other choice but to merge the two pension funds.”

The proposed new pension fund will continue even if the shared staffing arrangements end. It will be administered by a committee containing six members from Wandsworth and three from Richmond.

Cllr David Simmonds, chair of the LGA’s improvement and innovation board, recently said that shared services are now “standard practice”, with the majority of councils deploying them in some form.

Sharing pension funds is also increasingly common – for example, the London Pensions Authority and Lancashire County Pension Fund have joined together at estimated savings of £30m, and eight West Midlands councils and other organisations have also agreed to pool their funds.

The government has recently proposed reforms to the Local Government Pension Scheme (LGPS), including requiring funds to invest in ways which reflect the UK government’s foreign policy and allowing employees to remain in the fund if they stay in the private sector.

Unison has raised concerns that the changes will allow the government to use pension fund money to support national infrastructure projects.

Last year the Centre for Policy Studies called the LGPS “a national embarrassment” in a report saying it was poorly governed and at risk of running out of money.

Despite this, its membership has grown to over 10,000 organisations.

The latest edition of PSE features an article by Joanne Segars, chief executive of the Pensions and Lifetime Savings Association, about the challenges and opportunities facing the LGPS.

The consultation is open until 15 September. To take part, click here.

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.

 

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >

interviews

Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >

the raven's daily blog

Northern Powerhouse Partner aims to connect the North once again

02/09/2019Northern Powerhouse Partner aims to connect the North once again

In February this year, official Northern Powerhouse Partner, Cognitive Publishing, delivered EvoNorth 2019.  The two day event was designed to amplify and highlight futur... more >
read more blog posts from 'the raven' >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >