UK - The £1.3bn (€1.46bn) Cumbrian County Council pension scheme has ended a decade-long administration relationship with Capita in favour of linking up with a fellow local authority scheme.

The Cumbrian local authority will end the 10-year contract with Capita at the end of January next year and is in the process of transitioning a range of services across the council to new arrangements.

The pension administration function will now be provided by Lancashire County Council pension fund, as the two schemes seek cost efficiencies following the UK government's austerity drive.

The pension fund committee had examined moving administration in-house, appointing another private sector provider or using another local authority's administration team. In the end, moving to Lancashire's administration team was considered the most cost-effective option.

The Cumbrian scheme said: "The main priority arising from the expiry of the current arrangements [with Capita] was to ensure continuity of service and the future provision of high-quality and value for money services in the future."

Capita's administration services cost Cumbria £785,000 in 2009-10 - an increase of £68,000 on the previous year.

The projected cost of moving to Lancashire's administration team has not yet been made public.

The link between the two councils follows earlier announcements by Lancashire in April that it planned to seek cost efficiencies through working arrangements with both Cumbria and Merseyside.

The Lancastrian scheme has also elected to use a 'bench' of investment consultants on an ad hoc basis rather than retaining a permanent adviser, also in a bid to reduce costs.

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