LGPS pools estimated to have saved £155m

Local Government Pension Scheme (LGPS) pooled investment funds are estimated to have saved £155m since their creation in November 2015.

In an answer to a parliamentary question, House of Lord peer, James Younger, noted that LGPS pools had estimated the savings level up to March 2019.

The pools have also estimated annual savings of up to £200m in the coming years, with total savings by 2033 forecast at between £1,000m and £2,000m.

Since the government published criteria and guidance for the creation of pooled investment funds, eight LGPS asset pools have been established.

In answer to a separate parliamentary question, Young stated that the LGPS reform in 2014 and 2015 is estimated to save members an average of 2.2 per cent of pay by switching from a ‘final salary’ to a ‘planned career average’ scheme.

However, he warned that the government is currently considering changes to the public service pension schemes, following the McCloud and Sargeant rulings, which “will have cost implications for the reformed scheme.”

The cases found that changes to some public sector workers’, including judges and firefighters, pension schemes were discriminatory on the grounds of age.

In July 2019, the government confirmed that the Court of Appeal ruling applies to all public sector pension schemes.

It is estimated that the decisions could result in a £4bn bill for the government.

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