Two separate groups of U.K. local government pension schemes have been given the go-ahead to continue to work together and pool their assets ahead of a 2018 deadline.
The Central pool of nine pension funds, with a combined £34 billion ($42 billion) in assets, and the Welsh pool of eight pension funds, with a total of £13 billion in assets, have each received letters from Sajid Javid, local government minister, asking them “to carry on the ongoing work in order to have a functioning pool by the deadline of April 1, 2018,” pension fund executives said.
Last year, the U.K. government announced plans to pool the assets of the 89 England and Wales local government pension schemes. It asked the pension funds to propose how they would pool their assets.
Dafydd Edwards, head of finance at Gwynedd Council, said in an e-mail that the approval is good news, but Mr. Edwards declined to comment until all eight pool members had advised their committees. The council is the administering authority of the £1.4 billion Gwynedd Pension Fund, Gwynedd, Wales, which is part of the Welsh pool.
Colin Pratt, chief investment officer at the £3.1 billion Leicestershire County Council Pension Fund, Leicester, England, which is part of the Central pool, said in a separate e-mail: “Approval … had been necessary to continue our work on the basis that we would receive approval if we were to have a realistic possibility of having the pool set up by April 1, 2018.”
A further six pools have been proposed. Messrs. Edwards and Pratt said some of the pools would not yet have received the green light to go ahead because they have not met yet with Mr. Javid.