Multi-billion pound Northumberland and Tyne & Wear pension merger approved
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.
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Hide AdSouth 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.”
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Hide AdSTC 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.
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Hide AdBosses 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’.