Lothian Pension Fund and Falkirk Council Pension Fund shelve merger plans

Lothian Pension Fund (LPF) and Falkirk Council Pension Fund (FCPF) have confirmed that they will not be progressing with their proposed merger, and will instead re-visit the option in two years’ time.

The two funds initially agreed to explore the feasibility of a merger in 2020 after many years of successful collaboration between the two, carrying out an investigation of the expected benefits, disadvantages, costs and risks of a merger as part of this work.

After considering a comprehensive business case that set out the benefits to each fund, and confirming the feasibility of the merger, both individually and collectively, the committees approved a merger subject to approval by both councils.

However, following a high-level consideration of "some issues", the City of Edinburgh Council (CEC) asked LPF in June 2023 to consider how to enhance the current governance model and explore options for the relationship with FCPF rather than proceeding with the merger.

Following this request, at their committee meeting on 27 September, CEC’s Pensions Committee approved the motion to cease exploration of the merger at this time, with a view to re-looking at options in two years’ time.

Despite not being the original planned outcome, the two funds said that the exploration of the merger has been a valuable project, with both LPF and FCPF delivering various improvements, including further alignment of the investment and pensions administration processes.

In particular, the funds highlighted the roll out of a member self-service as a key success, as well as the introduction of new systems and processes across FCPF, such as automated workflow.

Commenting on the news, LPF chief executive officer, David Vallery, stated: “Through the work to date, both FCPF and LPF are in a stronger position, and we will continue to work closely with the CEC and Falkirk Council to build resilient and sustainable pension funds for both.

“We will continue working to deliver the best service we can for our members and employers and make it a great place for our colleagues. We will carry on with our successful collaboration with Falkirk and other strategic partner funds.

“We would like to take this opportunity to thank the teams from both pension funds and Councils for their hard work to support the project.”

Falkirk Council chief finance officer, Amanda Templeman, added: “FCPF will continue their close relationship with LPF, which over the years has resulted in excellent outcomes and benefits for our members.

"Both funds have a proven track record of successful collaboration and the work done to date in preparation for a potential merger has helped to improve the funds and strengthen existing relationships.”

    Share Story:

Recent Stories

Sustainable investing for DC schemes
Laura Blows discusses sustainable investing for defined contribution plans with BlackRock head of UK & MEA global consultant relations, Claire Felgate, in Pensions Age’s latest video interview

Spotlight on Emerging Markets
Francesca Fabrizi talks emerging markets with Polar Capital’s head of Emerging Markets & Asia, Jorry Nøddekær, exploring the opportunities for pension funds in the current global setting

Sustainable Investing
Laura Blows speaks to Royal London Asset Management sustainable fund manager, George Crowdy, about global sustainable equity investing
The latest in multi-asset credit
Laura Blows discusses the high-yield market and multi asset credit with Royal London Asset Management senior fund manager, Khuram Sharih