Islington Council's Pension Fund is set to consolidate its assets into larger pools, following the government's Fit for the Future
consultation outcome. The move aims to boost UK investment, increase returns for savers, and drive a greater focus on value over cost in the pensions system.
The Islington Council Pension Fund is currently part of the London CIV programme, which includes 33 London local authorities. The consolidation into larger pools could have significant implications for Islington, as the government aims to enhance investment returns and value for money.
The Islington Council Pensions Committee convened on Monday 30 June 2025, to discuss the implications of the government's response to the Local Government Pension Scheme (England and Wales): Fit for the Future consultation.
The consultation outcome, released on 29 May 2025, was accompanied by the final report on the Pensions Investment Review, covering both Defined Contribution (DC) schemes and Defined Benefits (DB), including the LGPS.
Key proposals from the government include:
- Delegation of investment strategy implementation to LGPS pools. This could lead to increased returns and a greater focus on value, but also necessitates careful risk management and due diligence.
- Principal investment advice to be taken from or through the pool.
- Transfer of all assets to pools by 31 March 2026, with flexibility for those moving to different pools.
- All pools to be FCA regulated and capable of due diligence on local and regional investments. This regulation aims to protect pension fund members' interests, especially concerning local and regional investments.
- Addressing restrictions on pool-to-pool collaboration in the pending Pensions Bill, due to the 2023 Procurement Act.
The government expects the 21 underlying Administering Authorities in the Access and Brunel pools to disband to look for another pool, reducing the number of pools from eight to six. The new bill would include powers to direct an Administering Authority to participate in a specific pool, meaning that the government will include powers in the new bill to direct an Administering Authority (out of the 21) to participate in a specific pool.
Administering authorities will set out local investment allocation targets as part of the Investment Strategy Statement (ISS), work with combined authorities and similar bodies such as the Greater London Authority (GLA) in London, and report on the impact of local investment within their Annual Reports. The government hopes to boost UK investment through this consolidation, particularly focusing on local and regional projects. The success of these investments will be measured and reported within the administering authorities' annual reports.
The government has set out a number of proposals based on recommendations submitted by the LGPS Scheme Advisory Board (SAB), as part of its Good Governance project, including:
- Requirement for administering authorities to appoint a senior LGPS officer responsible for management and administration of the Fund.
- Administering Authorities to participate in a triennial independent governance review and implement improvement plans if required.
- Administering authorities to be required to publish governance, administration and training strategies.
- Administering authorities to consider the appointment of an independent advisor.
- Requirement for improved accessibility and transparency within Annual Reports.
- Pooling companies to appoint representatives from partner administering authorities on their Boards and would be required to publish asset performance and transaction costs.
The pending Pensions Bill will address restrictions on collaboration between pools that arose due to the 2023 Procurement Act.