Three home counties councils are in talks to merge their town hall pension schemes in advance of the national consultation – launched by local government minister Brandon Lewis in May.
Buckinghamshire, Berkshire and Oxfordshire county councils have each in recent weeks invited their cabinets to give the green light to exploratory discussions with a view to combining their Local Government Pension Scheme (LGPS) funds.
Cllr Ian Hudspeth, the leader of Oxfordshire CC said: ‘We’re at the early stages. However if the currently ongoing work with our neighbours leads to a conclusion that we have found a value for money way of making savings that allows us to provide some additional protection to frontline services in the future, then we’ll no doubt be keen to move forward.’
Berkshire CC told scheme members that ‘scheme affordability has been a recurring theme for some times’, adding that the three counties are seeking ‘to identify potential cost savings from collaborative working.’
In recent years the three counties pension funds have all failed to hit their separate benchmarks for financial returns.
Buckinghamshire’s investments yielded a paltry 0.5% return compared with a 3.8% target in 2011/12; Berkshire’s £1.45bn pension pot saw a £7.8m reduction in assets and a £3.5m hike in assets as of February 2013, while Oxfordshire’s £1.32bn fund attained a 3.4% return against a 3.5% target in 2011/12.
Ministers are currently consulting on sweeping proposals which could lead to the merger of many of the 89 separate LGPS funds valued at more than £158bn.
The government wishes to drive greater co-operation among funds, reduce annual running costs estimated at £471m and narrow the wide variation in costs per member – which range from £28 to more than £300 for LGPS members.
The call for evidence, first mooted at the National Association of Pension Funds local authority conference in May, expires at the end of August.