Project Brunel - Investment Pooling
In 2015 the government announced that they wanted the 89 Local Government Pension Scheme funds to pool their investments into larger pools in order to achieve savings in investment management costs.
In response to the government agenda, Project Brunel was set up to explore the options for pooling investment assets across ten Funds. The founding Funds include The Environment Agency Pension Fund, and the Local Government Funds of Avon, Buckinghamshire, Cornwall, Devon, Dorset, Gloucestershire, Oxfordshire, Somerset and Wiltshire. The collective assets of the pool are approximately £23 billion.
The objective of pooling the assets is to achieve savings over the longer term from both lower investment management costs and more effective management of the investment assets. The pool will look to deliver the savings based upon the collective buying power the collaboration initiative will produce. Local accountability will be maintained as each individual fund will remain responsible for strategic decisions including asset allocation. The pooling of assets will only affect the implementation of the investment strategy in terms of manager appointments.
Investment Pooling update received 13 December 2016
Clive Elphick, Chair of the Pensions Committee recently communicated the message below to all Environment Agency staff on 13 December.
Ministers have reconfirmed their aim to drive Investment Pooling between Local Government Pension Scheme (LGPS) funds and ultimately can require funds to pool under the new LGPS Investment Regulations. The Environment Agency Pension Fund (EAPF) formed a project partnership with 9 local authorities, in or close to the South West, to explore pooling options. We have worked collaboratively to develop a formal business case for each to take to their Council / Board for decision on pooling investments together.
In previous communications we advised that the Environment Agency Board, as Administering Authority for the EAPF, would make a decision on Investment Pooling at the December Board meeting.
The full business case was reviewed by the Pensions Committee and the EA Board approved the recommendation to continue to develop the Brunel Pension Partnership pooling proposal.
This approval was made on condition that members’ pensions are not put at additional risk from investment pooling, that there are long term financial benefits and that our approach to Responsible Investment will be continued both by the EAPF itself and through the pension services to be provided by the Brunel pooling company.
Much work still needs to be done before formal entry into the pool, by drafting up the legal documents required to give effect to the Business Case in a way that protects EAPF’s interests. The Pensions Committee and Environment Agency Board will be monitoring progress through the Spring of 2017 as this work progresses before a final decision is taken on entry into the Brunel Pension Partnership."
For more details on asset pooling, please see our 'Asset Pooling Q&A' factsheet.
For more information and updates about the project please visit the Project Brunel website at www.brunelpensionpartnership.org