Multi-billion pound Northumberland and Tyne & Wear pension merger approved

Picture by PAPicture by PA
Picture by PA | PA (Press Association)
The government has given the green light to a multi-billion pound deal to merge two North East pension funds.

Bosses at the Tyne and Wear Pension Fund and the Northumberland County Council Pension Fund had argued the move would cut costs and could also see workers asked to pay in less, over the long term.

And following a public consultation, which saw just three responses submitted, all of which were in favour of the plans, ministers have agreed to press ahead.

Hide Ad
Hide Ad

South Tyneside Council (STC), which runs the current Tyne and Wear Pension Fund and will also administer the new fund, called the decision ‘fantastic news’.

A spokesman added: “This exciting project will build on the successful pension administration shared service which has been in place for the last two years.

“The merger will lead to economies of scale and improved resources to meet increasingly stringent standards.

“It will also lead to enhanced resilience, allowing the fund to respond to any potential future changes in the local government pension scheme.”

Hide Ad
Hide Ad

STC has already been providing admin services for the Northumberland fund for about two years.

Following the success of the arrangement, finance chiefs began transferring full control to STC in a move expected to cost the NCCPF £1 million, but slash running costs by about £500,000 a year.

According to a report for the Ministry of Housing, Communities and Local Government (MHCLG) savings from the overhaul should take up to three years to cover costs.

Previous reports have put the value of Tyne and Wear fund assets at £8.8 billion, while the Northumberland fund holds £1.4 billion, although the economic impact of the COVID-19 outbreak could affect this.

Hide Ad
Hide Ad

Bosses at MHCLG said the original application, submitted in 2019, made a ‘strong case’ for the merger and was backed by all the councils which make up the two pension funds.

The Northumberland fund is currently one of the smallest local government pension schemes (LGPS) in the country.

The report adds the deal will be put to Parliament with a recommendation for approval ‘at the earliest opportunity’.

The only previous merger of local government pension funds was between the London Boroughs of Wandsworth and Richmond in 2016, which was part of a wider move to share services between the two councils.

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

In order for us to continue to provide high quality and trusted local news on this free-to-read site, I am asking you to also please purchase a copy of our newspaper.

Our journalists are highly trained and our content is independently regulated by IPSO to some of the most rigorous standards in the world. But being your eyes and ears comes at a price. So we need your support more than ever to buy our newspapers during this crisis.

With the coronavirus lockdown having a major impact on many of our local valued advertisers - and consequently the advertising that we receive - we are more reliant than ever on you helping us to provide you with news and information by buying a copy of our newspaper.

Thank you