UK - Two out of five local government pension experts oppose the idea of pension superfunds, according to a survey by the National Association of Pension Funds (NAPF).

The results, presented to former Work and Pensions secretary Lord Hutton at a conference hosted by the group, also sees the large majority come out in favour of Hutton's reform proposals for pubic pensions systems, unveiled in October.

More than 80% of respondents deemed the proposals, which were part of a wide-ranging review of the UK pension system, reasonable and balanced, while 75% believed there was a case to be made for increasing employee contributions to local government pension schemes.

Joanne Segars, chief executive of the NAPF, said there was strong argument for an increase in contributions, but warned these should not penalise workers on lower salaries.

She added: "Those who work within local government pensions see the need for change, and think Lord Hutton is making a reasonable case. The challenge will be finding a solution that commands the support of employers, staff and those running the pension schemes."

The idea of creating superfunds, which would see the nearly 100 UK-wide schemes merge to create nine schemes in England and only a single fund for Scotland and Wales, only received the support of 37%, with 43% opposing.

However, two-thirds of experts thought schemes should work together, coordinating investments and sharing fund management services to reduce costs.

"There is clearly scope for councils to save money by working together to share pension costs, but there is a big debate about whether funds can be united to create regional schemes," Segars said.

"Many say full integration could be very complex and expensive to introduce."

Meanwhile, the trustees of the National Employment Savings Trust (NEST) have confirmed the recent appointment of State Street as fund administrator, as well as the earlier announcement that Tata Consultancy Services (TCS) would take responsibility for all aspects of scheme administration.

Pensions minister Steve Webb welcomed the TCS appointment as a significant milestone toward the planned reforms to workplace pensions.

Webb said: "We are on track for delivery of the reforms from 2012. NEST will offer access to a good-quality workplace pension scheme to many people who would not otherwise have the opportunity to save for their retirement."

NEST's chief executive Tim Jones added the scheme would benefit from the appointment of global leaders in the field.

"State Street Corporation has a considerable international track record, and it is exciting to have them on board," he said. "NEST is bringing together State Street Corporation and other global leaders to deliver a great product."

Both contracts will run for 10 years, with an additional five-year extension possible beyond 2020.

Finally, Barnett Waddingham has warned that the challenge of communicating with its scheme members should not be underestimated by NEST.

Speaking about the recently revealed investment mandates, which include a diversified beta portfolio, as well as a global equity mandate, partner Clive Grimley said: "No doubt the fund choice will not be presented using this language, but communicating the concept of a diversified beta fund to someone who has never held any investments in the past and may not even have a bank account will be difficult."

He said NEST's task was made even harder by its target audience consisting of low earners and micro employers, who may not have access to financial advice.

"Only time will tell whether the cost of establishing and maintaining NEST will deliver a genuine financial advantage to its target audience," Grimley said.