This morning (Friday 2 May) the Department for Communities and Local Government (DCLG) issued a consultation paper, Local Government Pension Scheme: Opportunities for collaboration, cost savings and efficiencies.
This is a hugely significant paper, and its proposals strongly resonate with those outlined in The local Government Pension Scheme: opportunity knocks, published by the Centre for Policy Studies (Michael Johnson, 2013).
The two key proposals are that:
These savings will accumulate over the years, potentially saving the LGPS employers (i.e. taxpayers) many £ billions in employment costs.
Michael Johnson comments:
“The Government’s decision to place the underlying research report, independently produced by Hymans Robertson, into the public domain is welcome. This introduces a degree of transparency hitherto unseen in public service pensions, and robustly shows that the additional costs associated with active fund management, relative to passive management, are unjustified. The Coalition has acted on this evidence, and it should be congratulated for its leadership. There are also of course profound implications for the on-going management of private section occupational pension funds.”