The current DCLG consultation on the future of the Local Government Pension Scheme majors on Collective Investment Vehicles as a way of addressing the deficit across the sector.
In Pensions Insight Magazine’s recent survey, 54% of LGPS respondents were either in or preparing to be in a Collective Investment Vehicle or other collaborative arrangement and so there is already evidence of a strong appetite within LGPS funds for joint working.
A partnership approach doesn’t have to stop at collective investment vehicles however. PWC’s Pensions Partner Marc Hommel has written:
‘The Government’s proposals rightly recognise that it's crazy for each individual scheme to have its own distinct pool of assets, which bring much higher investment costs but unlike larger funds no option to improve returns and diversify risks in relation to opportunities. But the proposals stop there.
They explicitly deny the opportunity to implement (or even consider implementing) further reform that would allow schemes to share benefits of up to £2bn a year through a number of financial, risk management and operational opportunities.’
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