Around £900m in cost savings is expected to be achieved from Local Government Pension Scheme (LGPS) pooling by 2023, Ministry of Housing, Communities & Local Government head of local government pensions, Teresa Clay, has revealed.

Speaking the PLSA’s Local Authority Conference, Clay also highlighted that around £300m in savings have already occurred to date via LGPS pooling, “largely from lower investment custody costs, due to greater scale”.

“The savings attributable to pooling are going to grow very, very steeply over the next couple of years and annual savings are expected to reach around £140m by 2023,” she added.

However, according to a poll taken at the conference, 52 per cent stated that ‘the data and reporting standards aren’t there yet to tell consistently across the board’ if funds are getting value for money from pooling, while 45 per cent voted ‘yes’, that funds were getting value from pools.

Clay stated that some of the challenges going forward, five years into the 15-year pooling programme, are wider pressures on local government, data and reporting to support transparency and accountability, delivering the full benefits of scale, and governance issues.

The conference’s poll into the biggest challenges still to be faced with pooling found governance to be the biggest concern for 70 per cent of respondents. Obtaining benefits of scale came second at 15 per cent.

Further transitioning of assets into the pool would be the most help in gaining greater efficiency in pooling, 52 per cent of poll respondents claimed. According to Clay, so far around half of LGPS assets have been transferred into pools.

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