The £3.5bn (€4.4bn) Hertfordshire County Council Pension Fund has opted to join the ACCESS asset pool, a collaboration of 10 local government pension schemes (LGPS) in the central, eastern and southern Shires in England.

The county council yesterday unanimously voted to back the pension committee’s recommendation, a spokesperson confirmed.

The ACCESS grouping was one of three pooling options reviewed by Mercer for the Hertfordshire pensions committee.

The other two options considered were the London collective investment vehicle (CIV), the asset pool for the 32 London boroughs and the City of London Corporation, and the London Lancashire Pensions Partnership (LLPP), a joint venture between the London Pension Fund Authority (LPFA) and Lancashire County Pension Fund (LCPF).

A report outlining the findings of the review was presented to the pensions committee at a meeting in early March, with the committee agreeing with Mercer’s choice for ACCESS as the preferred pooling option because of the strength of its governance structure and its being a strategic fit for the Hertfordshire Pension Fund.

“[T]he Committee agreed the degree of ‘like-mindedness’ and similar governance structures across pool members provided a strong foundation for developing a solution to pooling that would be in the best interests of the Hertfordshire Fund,” according to meeting minutes.

Other positives cited by the committee include that the ACCESS pool already has £25bn in assets under management, the minimum required by the government, and that it uses external managers.

The positives outweighed negatives such as that the ACCESS arrangement was “less well developed” than the other two options, with the future structure and set-up costs unknown, according to a report.

The Hertfordshire pension committee’s decision to go for the ACCESS LGPS pool is subject to the latter’s meeting the government criteria for pooling.

A report notes that the pool faces a “tight timescale” to deliver a proposal to the government.

In addition to scale, the government’s criteria for assessing the pool proposals relate to governance, costs and “value for money”, and an “improved” capacity for investing in infrastructure.

The local authorities have to deliver detailed submissions on the proposed pools to the government by 15 July.

The pension funds already collaborating on the ACCESS pool are from the following counties: Cambridgeshire, East Sussex, Essex, Hampshire, Isle of Wight, Kent, Norfolk, Northamptonshire, Suffolk and West Sussex.

ACCESS is one of eight pools that have emerged since the UK government instructed all 89 LGPS funds in England and Wales to form half a dozen asset pools. 

The Lancashire-LPFA arrangement is in discussions with the so-called Northern Powerhouse of Greater Manchester, Merseyside and West Yorkshire Pension Funds.

The Hertfordshire pensions committee described the potential merger as “increasing future unknowns”.

Berkshire Pension Fund has also been considering whether to join the LLPP.