View more on these topics

Council pension funds in ‘death spiral’

The Government is facing calls to consolidate 101 local council pension funds as part of radical proposals to improve efficiency and cut costs.

A joint letter has been signed by council leaders Peter Jones and Stephen Greenhalgh, former Shadow Treasury chief secretary Lord Flight, Cass Business School professor Andrew Clare and David Blake and Centre for Policy Studies research fellow Michael Johnson.

It warns that local government pension scheme funds, which differ to other public sector schemes because they are funded, are in “a death spiral” as each scheme is being forced to use these assets to meet current pension obligations.

It calls on ministers to consolidate the LGPS into five bigger funds with assets of around £30bn and increase the transparency of the schemes by publishing third-party service costs, net and gross investment performance and membership figures.

The letter says: “The Local Government Pension Scheme is a disparate collection of 101 separate funds, mostly of sub-optimal scale and delivering sub-optimal performance. Several are now so underfunded that they are beyond the point of no return.

“The inability of the LGPS to control costs is masked by the ineffective governance tripartite of employers, central and local government.”

Recommended

MEP backing shake-up for bank’s court

The European parliament’s economic and monetary affairs committee chair Sharon Bowles has backed the Treasury select committee in a row with the Bank of England over its accountability in the new regulatory structure. The TSC and the bank have been locked in a battle over the reform of the bank’s court of directors. The select […]

Finding security in bond markets

Martin Foden, head of credit research at Royal London Asset Management, explores the role of secured bonds, considering the impact of default and the characteristics of secured bonds versus supranationals and highlighting some examples. He also examines the evolution of the credit market and rating agency inefficiencies. Read the article in full: The value of […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Your talking bollocks!

Leave a comment