UK - The London Borough of Southwark has appointed BlackRock and Legal & General Investment Management to oversee around two-thirds of the local authority's pension fund assets.

When initially tendering the mandates, Southwark said the awards would be for a maximum period of 10 years, with as many as three managers initially being considered.

However, only BlackRock, which currently manages a balanced portfolio and a global equities portfolio, and Legal & General were appointed.

A spokeswoman for the scheme said the tender became necessary as BlackRock was responsible for too large a percentage of assets - more than 75% at the end of March 2011 - with the passive assets, accounting for 65% of the £850m (€1bn) total, now being split in half between the two managers.

Meanwhile, the Scottish government has raised concerns that it is being blocked from negotiating a settlement on the future of its public sector pension schemes independently from agreements reached by the Westminster government for England and Wales.

Scottish finance secretary John Swinney has written to Danny Alexander - as chief secretary to the Treasury responsible for settlements with both the unfunded public funds and the local government pension schemes - arguing the UK's government was seeking to expend influence and offer its consent to any changes, rather than any additional costs simply being covered by the grant.

Swinney also was unhappy about proposals to link state pension age to increasing longevity, a measure announced by chancellor George Osborne earlier this year.

"Far from allowing Scottish ministers to negotiate, the Treasury now plans to legislate on age requirements, will not guarantee to make legal changes we may need, and wants to extend its involvement in agreeing to any decisions we may make," he said.

"Despite the UK government beginning the process of scheme reform in the spring of 2011, it is still not clear how it expects its policy reforms to affect Scotland," he added. 

"Instead, they are making a series of increasingly ridiculous demands without any meaningful discussion with Scottish ministers."

Swinney said it was "incredibly disrespectful" that the UK government had not engaged with Scotland on the matter and that the current moves by Whitehall would prevent Holyrood's parliament being able to offer Scottish local government the freedom it needed to negotiate with public sector workers.

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