Earlier this month, the UK government delivered verdicts on local authority pension pool’s ‘fit-for-the-future’ pitches, giving the green light to six out of eight UK local authority investment pools’ proposals for meeting new minimum standards, and rejecting plans put forward by Brunel Pension Partnership and ACCESS.
The move followed a consultation on reforming the structure, investment and governance of the local government pension scheme (LGPS) in England and Wales, with the government saying it wanted all individual pension funds’ assets to be transferred to pools and for these to have internal management capabilities, regulated by the Financial Conduct Authority (FCA).
The investment pools and the rest of the pensions industry had until mid-January to respond to the government’s consultation. By the beginning of March the pools, working with their partner pension funds, had to deliver reports setting out how they intend to meet the government’s proposed requirements.
After the government invited Brunel’s and ACCESS’ partner funds to explore mergers, the Pensions and Lifetime Savings Association (PLSA) warned the mergers should be “fair” and “fully costed”.
While acknowledging the benefits of consolidation, the association said the interest of local authority fund members should be “paramount” after ACCESS warned that forced mergers could cost the pool between 28bps and 36bps of the value of active listed assets in pools alone, equivalent to over £100m.
Since then, Brunel has confirmed it is exploring options together with its partner funds while claiming it has not only met the initial aims of pooling but exceeded those aims.
Dashboards
After being delayed multiple times over the years, The Pensions Dashboard went live on 30 April for the first cohort of pensions providers and schemes.
Legal & General was the first pension provider in the UK to complete the connection to the country’s pension dashboard ecosystem at the beginning of April, marking a “crucial step towards making dashboard a reality”.
The connection by L&G is in line with the staged timetable set by the Department for Work and Pensions (DWP) and comes after it, along with firms Heywood and Pension Fusion, completed a final “system check” last month. This was to ensure everything works smoothly in a real-world setting, according to the Pensions Dashboards Programme.
All schemes are required to be connected by 31 October 2026, and user testing is expected to commence in summer 2025.
According to a survey by WTW, pension schemes are keen for private sector providers to launch their dashboards soon after the MoneyHelper Pensions Dashboard is released.
Small pots consolidator
On small pots, the government has unveiled reforms to tackle the growing problem of small, forgotten pension pots that many people accumulate as they move between employers over their working lives, which cost the industry around £225m in unnecessary admin costs.
Under reforms introduced by the government as part of the Pension Schemes Bill, each individual’s small pot will be brought together into one pension fund that is certified as delivering good value to savers.
According to DWP, this will cut costs for savers and make it easier to keep track of their pensions while boosting living standards and making working people better off. It will also cut red tape for businesses managing the pension schemes and unlock economic growth as part of the government’s Plan for Change.
Multi-employer CDC
The government has also confirmed that regulations allowing for multi-employer collective defined contribution (CDC) pension funds will be laid in the autumn of 2025, with “several organisations actively looking to set up an unconnected multiple CDC scheme” at the moment.
The government believes that due to their size, CDCs can be a more efficient vehicle for economic growth, with similar collective funds in Canada and Australia having proved an efficient way of supporting economic growth, investing in a wider range of sectors and assets.
In the UK, Royal Mail has already launched a CDC scheme for its employees, which has more than 100,000 members who are offered a combination of a cash lump sum and an income for life in retirement.
The government launched a consultation on the multi-employer CDC schemes in October 2024.
Items to note:
- The Impact Investor Forum 2025 is being held at The Conduit in London on Thursday 15 May 2025, 14:00 - 18:00
Pamela Kokoszka
UK Correspondent
This news briefing was published earlier in the week. If you would like to receive it regularly, on your ‘IPE profile’, go to ‘My Newsletters‘ and select any from the list.
Pamela is IPE's UK correspondent.
Before joining IPE in May 2023, she spent five years writing about the insurance industry.
During her career so far she won awards for Most Promising Newcomer in 2020 and Best Investigative Article in 2022 from the British Insurance Brokers Association, and was also highly commended at the WTW Media Awards for Insurance Features Journalist of The Year.View full Profile
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