Local council rejects Berkshire claims over failed scheme merger
Buckinghamshire County Council (BCC) has dismissed claims that a proposed pension scheme merger failed because it sought to collaborate with another council.
The reaction comes after talks between the pension schemes for the Royal Borough of Windsor and Maidenhead (RBWM), Buckinghamshire and Oxfordshire County Council fell through at the final hurdle, after months of working to merge investment management and administration activities.
The RBWM said negotiations failed due to on-going discussions between Buckinghamshire and Northamptonshire County Council.
The schemes began talks 18 months ago to cut costs and increase efficiencies, with all three councils agreeing that their investment and liability profiles matched to make a merger feasible.
However, in December, while committee members for the RBWM’s Berkshire Pension Fund approved extensive collaboration with the other two schemes, committees at Buckinghamshire and Oxfordshire rejected the merger.
They said no decision could be made until a central government consultation on investment strategies for the 89 local government pension schemes (LGPS) in England and Wales was complete.
The Department for Communities and Local Government (DCLG) is currently considering consultation responses on whether to mandate LGPS funds to invest all listed assets passively and via a collective vehicle.
However, the RBWM dismissed this reasoning and accused the councils of abandoning the merger after holding separate discussions with Northamptonshire.
In December 2014, the Buckinghamshire, Northamptonshire and Oxfordshire councils announced a Tri-County Council Alliance, with the view to working together across a range of issues.
In response to the RBWM’s claims, Neil Gibson, strategic director at Buckinghamshire, said: “Establishing the Tri-County Council Alliance and the formal decisions both ourselves and Oxfordshire made on pension fund collaboration with the RBWM were completely unrelated.
“The focus of the combined authority alliance is to unlock new opportunities for economic development across the three county areas and not on sharing or merging services.”
Oxfordshire also said it held no discussions with the Northamptonshire pension fund on collaborations or mergers.
When deciding not to continue with the RBWM, both Buckinghamshire and Oxfordshire said the DCLG consultation decision would materially impact the cost/benefit analysis undertaken on the merger.
However, Buckinghamshire also said the investment strategy between its £1.8bn (€2.4bn) pension fund and the £1.6bn Berkshire Pension Fund differed too greatly to merge, and the pensions committee agreed to investigate the possibility of collaboration with Oxfordshire alone.
The £1.5bn Oxfordshire Pension Fund’s committee similarly agreed to consider collaboration with “more suitable” pension funds.
A note explaining the failed merger published by Nick Greenwood, pension fund manager at the RBWM, said no mention of the Tri-County Council Alliance was made at previous meetings between the three funds.
“Consequently, it is clear both councils [Buckinghamshire and Oxfordshire] have no intention to collaborate with the RBWM on managing pension funds,” he said.