Local authority pension schemes ‘orphaned’ by the UK government’s decision in April to reject proposals by ACCESS and Brunel pension Partnership to meet new minimum standards set out for local government pension scheme (LGPS) pooling, have now all declared their new preferred pooling partner.
Former ACCESS partner funds have split into two groups. Seven of their partner funds, including Cambridgeshire, East Sussex, Essex, Hertfordshire, Kent, Northampton and West Sussex, will be joining Border to Coast Pensions Partnership. The remaining four – Hampshire, Isle of Wight, Norfolk and Suffolk – will be joining LGPS Central.
Former Brunel partner funds have, meanwhile, spread across three different investment pools. Gloucestershire, Oxfordshire and Wiltshire joined LGPS Central. Avon, Cornwall, Devon, Dorset and Somerset joined Local Pensions Partnership Investment (LPPI), and Buckinghamshire has joined London CIV.
The Environment Agency has not yet publicly announced its new pooling partner, but it is likely that it has chosen its preferred investment pool since the deadline to announce choices was set for 30 September.
While the process for finding a new pooling partner for LGPS has now concluded, the pools now have to complete governance and legal work to formally bring candidate funds into the respective pools, a process that is set to be completed by 31 March 2026.
LPPI, which has scooped five of the 21 ‘orphaned’ schemes, has also emerged as the leading contender to take on Brunel’s investment infrastructure, which currently employs around 75 people.
Brunel runs seven equity pooled funds, passive equity and private markets for 10 pension fund clients based in the West of England. LPPI is based in London and Preston, Lancashire, and manages £26.5bn (€30.4bn), according to its latest annual report.
LPPI’s position has been revealed in the agenda for a recent Avon Pension Fund (APF) committee meeting, which stated: “LPPI is likely, on the basis of initial discussions, although this is not guaranteed, to integrate the Brunel business […] Hence, APF is hopefully able to join LPPI with peer funds from Brunel.”
Following the APF meeting on 26 September, the scheme declared LPPI as its preferred pooling partner.
£1bn-plus buy-in
Moving away from LGPS, the BP Pension Fund has completed a £1.6bn buy-in deal with Legal & General, marking the first transaction for the £18bn fund. The insurer provided the fund with a Gilt-based price lock using the fund’s Gilt holdings, which ensured price certainty while the terms of the transaction were finalised.
This marked one of the largest transactions to be announced so far for the year. The only other transaction over £1bn included Compass Group Pension plan in a £1.5bn buy-in deal with Standard Life at the beginning of the year and a £1.1bn unnamed scheme buy-in with L&G.
PPF
As the UK Pension Schemes Bill progresses through parliament, the Pension Protection Fund (PPF) has decided not to charge a conventional levy in 2025-26, reducing costs for defined benefit (DB) pension funds and their sponsoring employers by a total of £45m.
The move reflects expectations that the government will grant the lifeboat fund greater flexibility over the levy.
The UK government has also confirmed plans to abolish the PPF administration levy, which has been suspended from 2023 to 2025 and returned this year, following a campaign by the Society of Pension Professionals
Items to note:
- The IPE Conference & Awards 2025 is taking place on 4 December at the Palacio de Congresos de Sevilla in Spain.
Pamela Kokoszka
UK Correspondent
This news briefing was published earlier in the week. If you would like to receive it regularly, on your IPE profile, go to My Newsletters and select any from the list.
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