Plans to bring together the pension funds of 32 London boroughs have moved ahead with a proposal to develop a common investment vehicle for more than £20 billion ($32.5 billion) of assets.
According to a news release by London Councils, a cross-party organization representing London’s 32 borough councils and the City of London, the proposal aims to reduce administration costs, increase return on investment, and maintain local accountability and control.
The assets currently are managed across 32 London boroughs on an individual basis. The proposal follows a report by the Pensions Working Group — commissioned by London Councils’ main decision-making body, the Leaders’ Committee — looking at issues around developing a London Local Government Pension Scheme collective investment vehicle.
In a statement, Jules Pipe, chair of London Councils and mayor of London Borough of Hackney, said: “This development could benefit all Londoners by reducing the cost of local government pensions, potentially increasing returns on investment and opening up the possibility of more investment in infrastructure.
“Unlike many other proposals to reform public-sector pensions, we can start work on this now as it does not require complex legislative change,” Mr. Pipe said in the statement.
The next step will be for the London Councils to work with the boroughs and the City of London to develop a common investment vehicle for these funds.
A spokesman for London Councils did not respond to a request for further comment.