News

02.05.14

Local government pensions reforms backed – but not fund mergers

The DCLG will not press ahead with plans to merge the 89 Local Government Pension Scheme (LGPS) funds, but it does believe better management could lead to substantial savings over the next decade. 

Following a review of the LGPS by pension experts Hymans Robertson, the consultation outlined two elements which could save taxpayers around £660m. The report also revealed that the cost of asset management across the scheme in 2012 was £790m, much higher than previously thought. 

Recommendations include moving to a passive management of listed assets like bonds and shares, accessed through a common investment vehicle; this could save £230m annually by cutting investment fees and a further £190m by reducing transaction costs. 

Additionally, it has been suggested that using a common investment vehicle to invest in alternative assets, ending the use of high cost ‘fund of funds’ arrangements, such as hedge funds, private equity, property and infrastructure, could save £240m a year. The report states that ‘fund of funds’ introduce an additional layer of fees, increasing the total cost of investment, but by setting up a  common investment vehicle this would help funds achieve the scale required to invest,  without the high costs associated with a ‘fund of funds’. 

Pensions secretary Brandon Lewis said: “Under the last administration, the cost of town hall pensions almost quadrupled to nearly £6bn, diverting taxpayers’ money from emptying bins, cleaning the streets and keeping Council Tax down. 

“This government is taking action to reduce the massive and unsustainable cost of state sector pensions. The proposals I am setting out will help reduce investment costs by £660m a year. For the first year in recent memory, the cost of town hall pensions to taxpayers is now falling.” 

Tell us what you think – have your say below or email [email protected]

Comments

There are no comments. Why not be the first?

Add your comment

related

public sector executive tv

more videos >

latest news

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 >

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 >

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 >

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

Cleaner, greener, safer media: Increased ROI, decreased carbon

23/06/2020Cleaner, greener, safer media: Increased ROI, decreased carbon

Evolution is crucial in any business and Public Sector Executive is no different. Long before Covid-19 even became a thought in the back of our minds, the team at PS... more >
read more blog posts from 'the raven' >

public sector events

events calendar

back

August 2020

forward
mon tue wed thu fri sat sun
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31 1 2 3 4 5 6

featured articles

View all News