The Local Government Pension Scheme (LGPS) in England and Wales is now waiting for the government’s final response to the ‘Fit for the future’ consultation after six pools were given the green light last week.
Six of the eight existing pools have had their plans to comply with the government’s “megafunds” objective approved.
Representatives from Border to Coast Pension Partnership, LGPS Central, London CIV and Wales Pension Partnership have confirmed to Pensions Expert that they have received the green light to proceed with pooling their remaining assets by March next year.
Meanwhile, Northern LGPS released a statement today confirming it had been approved by government, and Local Pensions Partnership (LPP) is also understood to have received approval.
The Department for Work and Pensions and the Ministry for Housing, Communities and Local Government have met with each of the eight pools to discuss the responses to the government’s ‘Fit for the future’ consultation.
Each pool was required to set out how it will pool all remaining assets by March 2026, as well as establishing internal strategic advice capabilities. All pools are also required to have an internal investment unit regulated by the Financial Conduct Authority (FCA).
The departments wrote to the pools in April informing of their decision in letters signed jointly by pensions minister Torsten Bell and Jim McMahon, the minister for local government and English devolution.
The government has rejected plans tabled by the ACCESS and Brunel pools.
ACCESS hit out at the government’s decision on Friday, arguing that the costs involved in merging with another pool amounted to “unnecessary expenditure of tens of millions of pounds and a financial burden on our scheme members which could alternatively be used to invest in UK productive finance initiatives”.
Other pools approved
Anthony Parnell, treasury and pension investments manager at Carmarthenshire Council – the host authority for the Wales Pension Partnership (WPP) – told Pensions Expert that the pool received government approval for its plans on 9 April.
According to Parnell, the letter sent by the government stated: “We have reviewed your proposal and are supportive of you proceeding as you have set out in line with the March 2026 deadline.
“It is clear Wales Pension Partnership has embraced the ambition to create a standalone LGPS investment company. We also note the WPP ambition to become a leader on local and impact investing within the scheme, as part of your five-year plan.”
A spokesperson for Border to Coast said: “Thanks to the support of our partner funds in our development over the last decade, the government has confirmed our Transition Plan meets expectations.”
London CIV also received approval on 9 April. “The government relayed support of London CIV’s proposal and commended the work we, together as the London LGPS community, have undertaken,” it said in a statement.
“Particular attention was given to our combined efforts to improve collaboration across the London LGPS community and our success in investing more than half of our private market assets within the UK.
“At this time, we are currently working on individual pooling transition plans with each of our 32 partner funds, all of which are on track to be completed by 30 June 2025.”
Clear pooling framework ‘essential’
Northern LGPS’s statement, released today (14 April), said: “We now look forward to the government’s response to the consultation, which we expect will provide much-needed clarity on the future regulatory and operational requirements for LGPS pools.
“A clear framework will be essential in ensuring that pooling continues to deliver strong governance, efficiency, and value, and allow us to move forward with confidence.”
A statement issued by LGPS Central said the government’s letter had praised its plan as “detailed, comprehensive, and aligned with the overarching ambition of the ‘Fit for the future’ consultation”.
The pool added: “We will continue to work closely with our partner funds to deliver on this ambition. We thank them for their collaborative approach and commitment to securing the best possible outcomes for the future of the LGPS Central pool and its members.”
