Northern LGPS (formerly Northern Pool), the £45 billion asset pool set up by the Merseyside, Greater Manchester and West Yorkshire pension funds, has protested at a proposed rule change from central government, which it said could add tens of millions of pounds to asset pool running costs.
Northern LGPS has written to government ministers to say it is very disappointed that they have downgraded value for money as a key objective in their latest guidance on pooling. The pool said that the latest guidance will result in a one-size-fits-all approach and that if it is required to operate as a company regulated by the Financial Conduct Authority (FCA), will cost an extra £10-15 million a year.
Northern LGPS’s warning was in a letter to local government minister Rishi Sunak, which followed draft guidance in January from the government. Northern LGPS’s letter was accompanied by legal advice to say that the draft guidance was ultra vires, and that the government would lose at a judicial review in court.
It is understood that other LGPS asset pools, including the Access pool, have also expressed concerns about the guidance and asked for it to be withdrawn. The Access pool has also obtained legal advice to say that it is unlawful for statutory guidance to make changes to a statutory instrument, because such changes can only be made by primary and secondary legislation, not by guidance.