According to a story in today’s Financial Times, London authorities may be about to take quite a bold shared services moves; pool their pension admin systems into one huge fund in a bid to save as much as £30m in back office costs.
The idea is apparently based on a similar scheme in Canada, says the paper. In any case, the plan would be to lump together all 32 London Boroughs pensions systems with the City of London Corporation and the London Pensions Fund Authority.
If it comes off, this so called ‘London Pensions Mutual’ would have one joint management structure but assets of tens of billions - and could even invest some of that back into London infrastructure projects.
It does seem to make sense. Does the capital really need 34 separate and parallel advisers, administrators, fund managers and associated IT? No wonder DCLG head Eric Pickles has signaled his approval.
Indeed, why stop there? Why not move to regional government shared pension funds?