Pensions - Articles - Mercer on local government pension scheme pooling proposals

 According to Steve Turner, Partner at Mercer, “The Chancellor's statement provides the clearest sign yet of the scale of ambition that the LGPS has been tasked to come up with on pooling. If done in the right way, this can have significant investment and governance benefits to the LGPS and also to wider society.

  

 "Individual authorities first need to determine how best to organise themselves into effective working collaborative relationships of sufficient scale. Groupings can then investigate the potential long-term cost savings of pooling but will also need to consider the cost implications of setting up a pooling structure and the ongoing governance and monitoring of the arrangement. A number of viable frameworks are being considered, including either setting up a structure from scratch or leveraging an existing framework to support pooling. These approaches differ in terms of short and long run objectives, resourcing needs, cost efficiency and speed of implementation."

  

 What this highlights is that there is a focused range of options available to the LGPS that have merit and we are working proactively with clients to address these. We shouldn't lose sight however of the LGPS's ultimate objective of providing pensions in a cost effective manner. This requires a holistic approach encompassing credible and transparent funding plans, effective cost management, best-in-class governance, return generation and risk management. There is no silver bullet. Continuous effort on all these fronts is needed”.