LGPS: Pooling should start from the bottom up

By Steve Simkins | 05 October 2023

On 2 October, the Department for Levelling Up, Housing and Communities’  consultation on the future of the Local Government Pension Scheme’s (LGPS) investments closed. It was launched after the chancellor’s Mansion House speech, and despite the many other LGPS challenges, it has dominated discussions for LGPS leaders and their investment pools ever since. Not only does it affect the future of LGPS investments, it has a bearing on future LGPS governance, resourcing and many personal career prospects.

Unsurprisingly the chancellor is taking a macro view of the LGPS, as he did with the private sector’s trust based Defined Benefit schemes and Defined Contribution schemes. Why can’t UK pension funds collectively contribute a small portion of their £trns of assets to support UK growth? Also, he can see the LGPS would be easier to influence and monitor if it is divided up into chunks with assets consolidated into fewer, larger investment pools, the suggestion being at least £50bn each.

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