LGPS Central

Overview of the Local Government Pension Scheme and asset pool

In 2015 budget, MHCLG invited local authorities to come forward with proposals to pool investments to reduce costs while maintaining overall investment returns. A proposal for a central pool was put forward and formally approved in November 2016. This pool was called LGPS Central Limited.

LGPS Central Limited was officially launched in April 2018 and is regulated by the Financial Conduct Authority.

 

What is an investment pool and what are the benefits?

For LGPS purposes, an investment pool is a method of collective investment. It is a way of putting sums of money from different pension funds into one large fund (LGPS Central Ltd) which are then spread across many investments and managed by investment managers.

The pool can then use the combined buying power of its partner funds to reduce costs, improve investment returns, widen the range of available asset classes for investment and ensure good governance, which benefits the stakeholders of the LGPS. The investment returns which the pool achieves are then distributed back into individual Funds.

 

Which local authority pension funds are in LGPS Central?

LGPS Central is one of eight LGPS pools in England and Wales and is responsible for the collective investment assets of eight pension scheme administrating authorities across the Midlands areas.

The eight pension scheme administrating authorities which make up LGPS Central are:

  • Staffordshire Pension Fund
     
  • Derbyshire Pension Fund
     
  • Leicestershire Pension Fund
     
  • Nottinghamshire Pension Fund
     
  • Shropshire Pension Fund
     
  • West Midlands Pension Fund
     
  • Cheshire Pension Fund
     
  • Worcestershire Pension Fund

 

Will pooling affect my pension benefits?

The pooling of investments has no negative impact on member benefits. The LGPS is a statutory public service pension scheme, so the scheme's benefits and terms are set out in regulations passed through parliament. The LGPS is a defined benefit pension scheme which means the pension you get is based on how long you have been a member of the scheme and how much you earn and will not be directly affected by stock market changes or performance of investments.

Even though the Staffordshire Fund is a partner of LGPS Central, the Fund will continue to retain its separate identity. The Fund remains accountable for providing pension benefits to our members.

 

 

Further information

You can find out more about how investments are managed on the LGPS Central Limited website. LGPS Central