Pensions fund enters £10bn partnership

Lancashire County Pension Fund (LCPF) and the London Pensions Fund Authority (LPFA) announced that they have agreed the structure of their ground-breaking Asset and Liability Management Partnership, which will pool combined assets of over £10bn to deliver cost savings and improve performance.

The new partnership will initially be known as the Lancashire and London Pensions Partnership (LLPP).

The LLPP will cover all aspects of pension fund management and be a fully-fledged pension service organisation, providing both jointly managed administration and pooled investment activities through newly created corporate structures.

Crucially, both funds will continue to maintain their local accountability with LCPF Pension Committee and LPFA Board maintaining control of key strategic decisions.

The formation of the LLPP will result in fee reductions, access to different types and a greater amount of direct investments, cost reductions in administration and more effective liability management.

County councillor Kevin Ellard, chair of the Lancashire County Pension Fund Committee, said: “Both the LPFA Board and the LCPF Pension Committee have considered detailed proposals and have agreed that such a partnership would be beneficial to both organisations, and presents an exciting opportunity that could assist in developing an alternative Local Government Pension Scheme model. The partnership will build on the existing expertise across all locations and increase co-operation and collaboration across all aspects of the organisations.”

The LLPP’s structure will also provide the benefit of investment scale and ensure that industry-leading standards of administration services and governance will be achieved.

It is planned that the LLPP will significantly reduce the funds’ combined investment fee costs by more than £32m within five years.

Cllr Jennifer Mein, leader of Lancashire County Council, said: "Taking a proactive approach to managing the assets and liabilities of the Lancashire County Pension Fund has really paid off in recent years and this new partnership will enable us to build on the expertise we have developed. "All local authority pension funds are facing the challenge of dealing with an ageing population and this partnership provides a model that will help us meet that challenge."