Tuesday, April 10, 2012

LGPS makes headlines in the FT - but we still don't know what's going on...

Every day that lengthens the weeks since a proposed "deal" on the "big ticket items" for the 2014 Local Government Pension Scheme (LGPS) was put before Government Ministers is another day on which I remember that Eric Pickles knows more about the future of my pension at the moment than I do.

Today brings the news (in the form of the main headline on the front page of the Financial Times) that plans for the merger of London local government pension funds have the "broad backing" of the Communities Secretary (http://www.politicshome.com/uk/story/25974/ - or over a paywall at http://m.ft.com/login?dest=%2Fcms%2Fs%2F0%2F2a86c21c-8161-11e1-8aae-00144feab49a.html).

Bringing together the management of the 34 London local government pension funds could achieve economies of scale at the expense of the private fund managers (who currently take a slice of our money in return for deciding where to invest it). Local authorities have the powers to share such services now (and even, somewhat misleadingly, to describe such a venture as a "mutual" if politicians think that Joint Board or Joint Committee sounds too stuffy).

Branches would have to be alive to the risk to the jobs of staff carrying out the key administrative tasks in the boroughs (particularly since such "transactional" tasks have already been identified as ripe for "sharing" - and therefore for privatising). There is, however, no reason "in principal" to oppose replicating in London the structure which already exists elsewhere in England, where County Councils (or other joint bodies based on the former Metropolitan County Councils) run pension funds which also cover Districts (and unitary authorities).

If - as the FT suggests - the consolidation of the funds enabled focused investment of our money in infrastructure projects in London which would benefit our communities whilst delivering the long term returns required to pay future pensions that, too, might be no bad thing, although a lot will depend upon detailed arrangements for governance in the 2014 scheme.

The fact that this story takes the front page of today's Financial Times demonstrates that the £30 billion invested around the world on behalf of London local government workers is of interest to those who make a (good) living making money out of other peoples' money. This should be of at least equal interest to those of us whose money it is.

However, the most important questions which I (along with other LGPS members in London) have at present are those to which I indicated my preferred answers by the action I took on 30 November;

Will I have to work longer to receive an unreduced pension?

Will I have to pay more?

Will I receive less?

To these I would add one (or perhaps two) more - are we content to wait forever for a response from the Government? Have our negotiators given Eric Pickles complete control of the timetable?

Sent using BlackBerry® from Orange

1 comment:

Ian Albert said...

Posted a comment on your earlier blog on civil service pensions. If you get a chance to reply, be good to hear from you. You can message me on Ian_Albert on Twitter.