Local Government: Pensions

House of Lords written question – answered on 16th December 2014.

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Photo of Lord Mendelsohn Lord Mendelsohn Labour

To ask Her Majesty’s Government whether they estimate that savings could be made to the administration of the Local Government Pension Scheme and the operation of its sub-funds if the management of the funds were moved from active managers to tracker funds; and if so, to what extent.

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

The consultation Opportunities for collaboration, cost savings and efficiencies set out how the Local Government Pension Scheme could deliver annual savings of £660 million by reforming the way the funds make their investments. Advice commissioned by the Minister for the Cabinet Office and the Minister for Local Government using the Contestable Policy Fund was used to inform the consultation. Of the £660 million savings identified, the analysis showed that £420 million could be found by using passive, rather than active management of listed assets such as bonds and equities. Over 200 consultation responses were received and a Government response will be published early in 2015.

Both the consultation and supporting analysis are available at: https://www.gov.uk/government/consultations/local-government-pension-scheme-opportunities-for-collaboration-cost-savings-and-efficiencies

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