Lothian Pension Fund and Falkirk Council Pension Fund considering merger

The Lothian Pension Fund and Falkirk Council Pension Fund have announced plans for a potential merger, in what has been highlighted as a "significant and positive development" for members and employers.

The merger would build on the history of successful collaboration between the two funds, with the pension committees of both the City of Edinburgh Council (the Lothian Pension Fund) and Falkirk Council leading on this work for some time.

As part of this, both funds have carried out an investigation of the expected benefits, disadvantages, costs and risks of a merger, which suggested that the merger would have a "favourable outcome".

The work to undertake due diligence and implement the proposal is expected to commence this year and is expected to take around 15 months to complete, with the funds looking to target completion of the merger in 2023, subject to final approval of both councils, regulatory clearance and legislative process.

Both funds will be transferred to a new merged fund, which will be the new pension provider, although there would be no changes for members, deferred former members or pensioners of the funds, and the value of benefits built up and how they are paid will remain unchanged.

The funds confirmed that a comprehensive communication and engagement plan for members and employers to be undertaken well in advance of this, with members expected to benefit from greater access to improved technology and more efficient operations.

Commenting on the plans, LPF chief executive officer, David Vallery, said: “I’m confident that a merger between Lothian Pension Fund and Falkirk Council Pension Fund is in the best interest of our members, employers and colleagues.

“Both funds share the same principles and objectives: to provide excellent administration to members and to invest assets responsible. These will remain cornerstone goals if the merger was to proceed.”

Falkirk Council Pension Fund chief finance officer, Amanda Templeman, added: “Falkirk Council Pension Fund and Lothian Pension Fund are exploring an innovative approach to Local Authority Pension Fund Management which has the potential to improve the operation and resilience of the funds.

“The two funds have worked effectively together for over 10 years and the potential merger looks to build on that successful partnership. As ever, our focus is on doing the right thing to safeguard the interests of our scheme members.”

The funds also confirmed that the merger should have no immediate impact on colleague roles for either fund, explaining that whilst there may be some restructuring to align to the new operating model as the merger proceeds, this will not involve redundancies.

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