The Berkshire pension fund, administered by Windsor & Maidenhead RBC, has formally joined the Local Pensions Partnership despite previously expressing doubts about the government’s pooling project and the value of joining the LPP.
In September Berkshire was the only one of the 89 LGPS funds not to have formally committed to a pool.
The LPP has now announced the Berkshire fund has entered into a memorandum of understanding about joining the pool. This confirms Berkshire will pool its investments with those of the London Pension Fund Authority and the Lancashire CC fund, already managed by LPP, and that the partnership will manage Berkshire’s administration, liability management and employer risk services.
A full business case has yet to be approved by Berkshire’s committee.
John Lenton (Con), chair of the Berkshire pension fund committee, said: “We’re pleased to be taking this important next step to pool with the LPP, and provide our members with cost effective and efficient pensions arrangements.
“This partnership strengthens our ability to manage our assets and liabilities together, helping us to continue improving long-term fund performance and stabilise contributions.”
The fund had resisted joining a pool in defiance of government instructions due to reservations about the impact Berkshire’s investment strategy.
In an exchange of letters with local government minister Marcus Jones in spring this year, chair of the Berkshire pension fund committee John Lenton (Con), said the committee was “looking for costs savings, not increases and [has] yet to see how such savings will be achieved” through pooling.
However, Mr Jones instructed the Berkshire fund to join the LPP as finding another pool at that stage was “no longer a viable option”.
Asked by LGC whether these concerns had been addressed, a spokesperson for the Berkshire fund said: “We welcome the signing of the memorandum of understanding and will be working closely with LPP to ensure pooling arrangements are in place by April 2018.”
A spokesperson for the LPP said: “We can’t comment on the detail as negotiations are still ongoing, but we will provide more detail in the future as soon as we are able.”
LPP chair Michael O’Higgins (pictured) said: “This agreement is an important step in our collaboration with the Berkshire pension fund. We look forward to working closely with Berkshire in helping to bring the same sustainable benefits to the fund and its members as to those of our existing clients.”