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Two of Britain’s biggest local government pension funds are exploring mergers with other municipal pension schemes in a race to meet a government deadline on their future.
Speaking at Mansion House, Rachel Reeves revealed plans to create pension ‘mega funds’ to invest billions of pounds in UK businesses and infrastructure to drive growth. They include measures to tie together the growing Local Government Pension Scheme (LGPS), which has £355bn spread across 86 councils.
These funds – which invest in stocks, bonds, property and other assets – pay the pensions of six million workers. The LGPS has eight pools, but the Chancellor wants them to be consolidated to have economies of scale to invest as public sector funds in Canada and Australia.
Crucially, he has insisted that all pools be regulated by the Financial Conduct Authority.
The future: Rachel Reeves has revealed plans to create pension “mega funds” to invest billions of pounds in UK businesses and infrastructure to drive growth.
Two of the largest groups – Access, made up of 11 councils in the south-east of England, and Northern LGPS, which covers Greater Manchester, West Yorkshire and Merseyside – are not authorized by the FCA.
Both want to create their own licensed structures, but have also approached other regulated pools to propose mergers. The Government consultation closes next week.
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