This month, the head of Reform UK revealed plans to end the defined benefit (DB) pension scheme for new local government workers and merge 100 pension funds in the local government space into a £500bn (€574bn) British sovereign wealth fund (SWF).
Richard Tice, head of Reform’s proposed Department of Business, Trade and Energy, criticised the Local Government Pension Scheme (LGPS), which covers 98 funds and has assets of around £500bn, as “well-intentioned but woefully managed in a disparate, uncoordinated way with no vision and no purpose of backing Britain”.
But the industry has rejected Tice’s characterisation, with Zoe Alexander, executive director of policy and advocacy at Pensions UK, describing LGPS as “one of the largest and most successful pension schemes in the world”, fully funded and consolidating assets into six pools ranging from £25bn to £100bn, with savings so far estimated at £1bn.
She described LGPS as an “exemplar” UK investment, returning around 7% per year over the past decade, and called Reform’s plans “concerning”, arguing the scheme exists to fund retirements for seven million local government workers, not government projects.
Collective defined contribution
As the consultation on The Pension Regulator’s (TPR) code of practice for collective defined contribution (CDC) pension funds came to an end, the industry has called for fine-tuning to reduce remaining uncertainty.
Launched in December, the consultation set out how TPR plans to authorise and supervise multi-employer CDC schemes, expanding on its existing single-employer framework. The revised code reflects government regulations published in October, expected to take effect at the end of July 2026, alongside TPR’s finalised guidance.
The proposals aim to open the market to third-party providers, setting expectations around governance, investment, communications, and the fitness and propriety of those running pension funds.
Investment strategy, sectionalisation and defining “significant events”, were flagged as areas where clarity would be “critical”. The draft code is seen as a “key step” ahead of the July 2026 deadline when the government’s regulations are expected to take effect.
PPF levy
Following the progress of the Pension Schemes Bill, which contains measures concerning levy restrictions, the Pensions Protection Fund (PPF) has confirmed it will set a zero levy for the next year, marking it as the second consecutive year with no levy for traditional pension funds.
The PPF now said it is “reassured” by the consideration given to the changes needed to conclude its decision-making following the government’s introduction of amendments to the Pension Schemes Bill, which will abolish the administration levy and enable the PPF to cover all its operating costs from its core.
Items to note:
- The Impact Investor Forum 2026 is taking place on 14 May at The Conduit London.
Pamela Kokoszka
UK Correspondent
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