The UK government has given the Central local government pension scheme asset pool the go-ahead to proceed with the plan it submitted for its formation to the Department for Communities & Local Government (DCLG) in the summer.
All of the emerging local government pension scheme (LGPS) asset pools have been invited to meet with the minister, Marcus Jones, with LGPS Central and the Wales pool having been the first to have their meetings, last week.
The round of meetings will extend into early December.
The pools, at least some of them, have been anxious to get feedback from the government about the models and plans they have proposed for setting themselves up, given what they see as a tight timeframe for being operational by the 1 April 2018 deadline.
LGPS Central happened to be the first of the pools to meet with the minister and has received a letter that effectively amounts to approval of the pool’s plan.
Colin Pratt, investments manager at Leicestershire County Council, the administering authority for the Leicestershire Pension Fund, said: “The letter more or less says ‘carry on the good work’, and it doesn’t raise any issues that need addressing, so it’s basically ‘carry on and get through the first of April 2018 in the way that you’re proposing to’.
“I think that’s probably as close as we’re going to get to formal approval.”
The Wales pool had not replied to a request for comment from IPE by the time of publication.
The eight pension funds* in LGPS Central are intending to pool £32.6bn (€38.5bn) of assets, well above the £25bn that had been indicated by the government as a minimum requirement.
The letter confirmed that the pool’s authorisation by the Financial Conduct Authority (FCA) is a pre-requisite.
Obtaining this authorisation is part of “a huge chain of events” that must happen in the run-up to April 2018, according to Pratt.
This includes making key appointments, to positions such as a chief executive and a COO and of providers such as asset servicers, he said.
“There are a whole host of things that need to be done, and we are working on all of them,” Pratt said. “We have made good progress to date, but the timetable is still very challenging.”
Pratt noted that the governance structure and regulatory set-up being targeted by LGPS Central was closely aligned with the model initially suggested by the DCLG, as this was deemed the best fit for the eight pension funds forming the pool.
*Pension schemes for Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands Pension Fund (including West Midlands Integrated Transport Authority) and Worcestershire