Want to know more about the changes to local government pension schemes? Check out Part I and Part II of this blog series.
On July 15th, local government pension schemes across England and Wales had to submit final proposals for merging the existing funds into eight big pools. Since these proposals are in, we now have more of a sense of what is likely to happen to public pension schemes, and the divestment campaigns targeting them.
Drumroll… Here are the pools!
| Pool Name | Which Authorities? | Pool Size |
| ACCESS | Cambridgeshire, East Sussex, Essex, Hampshire, Hertfordshire, Isle of Wight, Kent, Norfolk, Northamptonshire, Suffolk and West Sussex | £33.5 billion |
| Central | Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands Integrated Transport Authority, West Midlands and Worcestershire | £34 billion |
| London CIV | All of the London boroughs and the City of London authority | £25 billion |
| Northern Pool | West Yorkshire, Greater Manchester and Merseyside | £35 billion |
| Brunel | Avon, Cornwall, Devon, Dorset, Gloucester, Somerset and Wiltshire, Oxfordshire, Buckinghamshire and the Environment Agency Pension Fund | £23 billion |
| Wales | Carmarthenshire, Cardiff, Flintshire, Gwynedd, Powys, Rhondda Cynon Taff, Swansea and Torfaen | £13 billion |
| Borders to Coast | Cumbria, East Riding, Surrey, Warwickshire, Lincolnshire, North Yorkshire, South Yorkshire, South Yorkshire Passenger Transport Pension Fund, Tyne & Wear, Durham, Bedfordshire, Northumberland and Teesside. | £36 billion |
| LPP | Lancashire, Berkshire and the London Pension Fund Authority (LPFA) | £13 billion |
What Happens Next?
Although the proposals are in, a lot of things about the pooling scheme are still up in the air.
The government is expected to give confirmation in October for funds to go ahead with their proposals. However, even if this happens as planned, the collaborations largely aim to pool assets by April 2018 (although the London CIV and LPP are already operational). The whole process also faces delays due to the need for regulation changes to come into effect.
Further, a petition by UNISON calling for the pooling regulation to be debated in parliament has reached 100,000 signatures, meaning it must be discussed. UNISON support the pooling in principle, but believe that union and council representatives must control the funds, not central government. This could lead to further delays, or radical reconfigurations of the pooling structure itself.
April 2018 might seem a long way off, but as divestment campaigners we should start planning ahead.
The proposed schemes are mostly regionally-organised which sees off one major fear about this project. However, unless the questions about governance raised by UNISON and others are answered, these changes could still form a major barrier to pension funds taking action on climate risk and divesting. It’s more important than ever that campaigners across the country are talking to each other as, soon, we might all be working rather more closely.
Find out how much your local government pension scheme invests in fossil fuels here, and find your local campaign for divestment here.
Further Reading for Pensions Nerds
- ‘How will LGPS pooling work in practice?’ Pensions Expert [Registration required]
- ‘UK’s Northern pool to go direct in alternatives, targets 25% cost reduction’ Investment & Pensions Europe
- ‘LGPS pools face challenges by delayed regulation overhaul’ Professional Pensions
- ‘What will the Leave vote mean for Project Pool?’ Pensions Expert [Registration required]
- ‘LGPS pooling: what are the final plans?’ Professional Pensions [Paywall, registration required]
- ‘Petition calling for debate on pension funds attracts 100,000 signatures’ LocalGov
- ‘Nine schemes submit case for LGPS Central pool’ Professional Pensions [Paywall, registration required]