Robber Reeves Wants To Amalgate 86 Council Pension Funds.

A few facts from the LGPS website might help.

"The facts

The LGPS is one of the largest pension schemes in the UK. It is a defined benefit pension scheme which means your pension is based on your salary and how long you pay into the Scheme. Your pension is not affected by how well investments perform. The LGPS provides you with a secure and guaranteed income every year when you stop working.

The figures

Across England and Wales the LGPS currently has 6.1 million members:

2 million people are currently paying into the LGPS
1.9 million people are being paid a pension from the LGPS
2.4 million have a pension with the LGPS that they have not taken yet
Over 18,000 employers participate in the LGPS.

In March 2022, the market value of the LGPS was £361 billion."

Hope this helps.

When you consider the number of company schemes that have gone down, when the company has gone bust and pension funds have not received all they were due, why anyone thinks that ordinary pension funds are so safe, I cannot thing.

There was Phillip Greens Arcadia empire, BHS. Carillion, Allders Stores, Austen Reed, Country Casuals, Bernard Matthews and hundreds more, with known and unknown names.

The government of the day set up the Pension Protection Fund to try to protect pensioners after the Maxwell empire collapsed. My uncle's (by marriage) brother worked for over 30 years for a big company of printers taken over by Maxwell. For over 30 years he paid into a pension schem that enabled him and his wife to retire in modest comfort. Then one day he got a check for £1,500 and told that was his share of the asset value of the fund, thank you and good by. From then on his income was state pension only. He was 70.

So do not ssuggest that everyone is safe if things stay as they are and unsafe if they change

Elegran

Two questions - what safeguards are currently in place to make sure that pension pots held in individual LAs don't vanish if the LA goes bust and needs to appropriate the money? and are the same safeguards or even stronger ones to be put in place to protect the pension pots in these larger mega-pots?

If the answers to these questions are satisfactory, I don't see why some posters are so against the idea. It sounds sensible to me to get the advantages of investing as larger chunks and earning better interest rates, so long as the risks of losing those same bigger chunks (either by market fluctuations or by meddling) have been considered and protected against.

Good questions Elegran. There is some cause for concern when you can read on GN and other media about LAs going bankrupt.

Protection against meddling-yes very important.
Fluctuations?
Timescales in investments are also a difficulty.

Investments are tricky. Would LAs go for a low risk, ‘safer’ option, where the investments make less money than those in ‘moderate risk’ or higher risk’ but are less likely to lose money?

How much experience with the administration have? Would they personally lose on a scale equivalent to any losses their choice of investment might make?

My pension is LGPS and it seems a good idea to me. My former County Council has already taken over the management of some smaller CCs pension funds so I am not sure why people are so worried about this.
I am also astonished by the outrage of so many posters on this thread. Are you all in LGPS?

I am in receipt of an LA pension and the GMPF is the largest LA pension fund in the scheme I think.
It always had “ lots and lots” of funds.
The Authority my H worked for was the administrator for the fund and my H was on the advisory board.
I should like to hear his opinion on the proposal.
Sadly it’s too late for that now.

The Tories support this plan so that may make posters feel more confident about it. Here is Casdon's link for those who haven't seen it.

The right thing to do': Tories welcome chancellor's planned reforms to pension funds
We've just been speaking with shadow levelling up secretary Kevin Hollinrake, and we started by asking for the Tory party's view on the chancellor's plan to create pension "mega funds" to free up funding to invest in British infrastructure.

He replied that it is "a good plan" that "builds on what we did last year".

"Too often our pension funds have been investing in things that are seen as safe investment, things like government bonds, gilts.

"So this is the right thing to do," he said.

Sky's Wilfred Frost expressed some surprise at the rare support from the opposition for the government's plans, and Mr Hollinrake replied: "As we've said in the past, where we can support, we will.

"We want the government to succeed. But we will call it out where we think it has got things wrong."

t sounds sensible to me to get the advantages of investing as larger chunks and earning better interest rates, so long as the risks of losing those same bigger chunks (either by market fluctuations or by meddling) have been considered and protected against.

Of course any 'investment', by any LA or investment fund is a risk, because it's all about speculating. That's why investment funds put a lot of their funds into government bonds, which are guaranteed to pay the interest due on them and the full principal can be repaid at end of term.

I can't see the particular difficulty with a 'mega fund', but I do wonder how much would be raked off in fees by the fund operators.

I also wonder what effect the Trump presidency will have on the financial markets...

Casdon

GrannyGravy13

I am waiting to hear what RR has to say about DC pension schemes which are operated by private companies.

It was said on the breakfast news (ITV) that she is looking into the possibility of legislation to merge these into a mega fund.

Personally I am not in favour of government intervention in where and how private pension funds are to be invested. Only time will tell what she has planned.

Does she mean a scheme similar to the one they operate in France perhaps *GrannyGravy13? It would be interesting to hear from anybody receiving a French pension to see what they think.

There was no information on the news other than reference to a mega fund

We spent a lot of time choosing a fund for our DC scheme, I wouldn’t be happy to have that choice removed which is why I am waiting for more information.

GrannyGravy13

I am waiting to hear what RR has to say about DC pension schemes which are operated by private companies.

It was said on the breakfast news (ITV) that she is looking into the possibility of legislation to merge these into a mega fund.

Personally I am not in favour of government intervention in where and how private pension funds are to be invested. Only time will tell what she has planned.

Does she mean a scheme similar to the one they operate in France perhaps *GrannyGravy13? It would be interesting to hear from anybody receiving a French pension to see what they think.

I am waiting to hear what RR has to say about DC pension schemes which are operated by private companies.

It was said on the breakfast news (ITV) that she is looking into the possibility of legislation to merge these into a mega fund.

Personally I am not in favour of government intervention in where and how private pension funds are to be invested. Only time will tell what she has planned.

It looks like it’s a separate body to the administration which each Local Authority directly controls Elegran, I just looked it up and found this.
www.lgpsmember.org/about-the-lgps/how-the-lgps-is-run/#:~:text=The%20Scheme%20is%20administered%20locally,comply%20with%20the%20Scheme%20rules.
Presumably the Local Pension Boards would be replaced by one National Pension Board under these proposals? It sounds similar in that respect to the NHS pension arrangements which are already run nationally, and have a Board.

Two questions - what safeguards are currently in place to make sure that pension pots held in individual LAs don't vanish if the LA goes bust and needs to appropriate the money? and are the same safeguards or even stronger ones to be put in place to protect the pension pots in these larger mega-pots?

If the answers to these questions are satisfactory, I don't see why some posters are so against the idea. It sounds sensible to me to get the advantages of investing as larger chunks and earning better interest rates, so long as the risks of losing those same bigger chunks (either by market fluctuations or by meddling) have been considered and protected against.

vegansrock

I think it’s any excuse to bash the government.

Absolutely especially considering the Tories were already looking at doing something similar.

Skynews missed a trick, they had some consulting actuary on who was speculating on what this might mean. They could have had the mae13 and karmalady on to explain it all.

Seems OP hadn't done any homework. Detention in order I think, go to the back of the class.

Quite simply, there is a massive lack of confidence in the present government due to their inept handling of winter fuel allowance, pay rises for aggressive unions, apparent attacks on pensions, national insurance and inheritance tax.
These may prove to be workable and profitable, but confidence damaged takes a long time to rebuild.

Perhaps a sensible start would be to refer to people by their names.

O/P had simply not done the homework as to the history of this scheme.

We are being drawn more and more into communism and dictatorship

Really? It's a shame that some of the above posts seem driven more by party politics rather than a considered view of the decision, which seems eminently sensible to me.

I understand there were possible plans being looked at by the Conservatives about this, and now I understand Rachel Reeves is proposing similar plans during her Mansion House speech tonight. I understand similar schemes operate in Canada and Australia. I don’t know if this will be good for British pensioners or otherwise.

Yes, Jeremy Hunt wanted to do this. Would you have called him names?

The scheme is also supported by the Tories, who were planning to do the same thing, so I was surprised to see your post mael13. What is your objection, specifically?

news.sky.com/story/politics-latest-starmer-reeves-pensions-labour-badenoch-conservative-trump-12593360?postid=8617489#liveblog-body

yes, Welbeck

Read the facts:

www.theguardian.com/business/2024/nov/13/rachel-reeves-megafunds-uk-public-pension-system#:~:text=The%20chancellor%20will%20tell%20an,defined%2Dbenefit%20schemes%2C%20with%206.5

Based on successful schemes in Canada and Australia, its not a new idea in the UK
"Last autumn, the Conservative then chancellor, Jeremy Hunt, hinted at further consolidation, saying that by 2040, all local government pension fund assets would be invested in vehicles worth £200bn or more, leading many to speculate he wanted to cut groupings down into two or three pools.

I think it’s any excuse to bash the government.

Isn't it more cost effective to have larger funds.
Less spent on admin so the funds should be more productive thus benefitting the pensioners.
Are the complainants above currently in receipt of LA pensions?
If not why does it bother them so much?