CPS Research Fellow and pensions expert Michael Johnson has authored an open letter calling for the 101 local government pensions schemes to be merged into just five to ensure more efficient performance.
The letter, which has been co-signed by council leaders such as the influential Stephen Greenhalgh of Hammersmith and Fulham (and author of CPS publication ‘A Magna Carta for Localism‘) and Peter Jones of East Sussex Council, also proposed that the funds should be open to public scrutiny.
Also backing the call is CPS Advisory Board member Lord Flight, Professors Andrew Clare and David Blake of Cass Business School, and PA Consulting Group Chief Executive Jon Moynihan.
The letter says:
“We recommend that the 101 funds should be consolidated into a smaller number of larger funds, say five, each with assets of some £30bn. ‘Scaling up’ would enable the new funds to harness economies of scale, thereby improving their efficiency.”
The group also recommends more transparency from the LGPS in revealing costs.
Currently LGPS funds are able to exclude members of the press and public from pension committee meetings under rules of the Local Government Act 1972 and do not have to disclose decisions made at meetings.
The letter added: “The funds should be open to independent public scrutiny. However, sourcing the primary data, the necessary pre-requisite to do this, is presently very difficult.
“This culture of opacity must be confronted. It provides the backbone of the defence from those opposed to change, and is at odds with the today’s clamour for more transparency in respect of the financial services industry.”
Date Added: Wednesday 1st February 2012