Hertfordshire has joined ten local administering authorities to pool their pension assets through A Collaboration of Central, Eastern and Southern Shires (ACCESS).
The local government pension scheme (LGPS) pool will have more than £33bn assets under management, which will meet the government's size criteria for pools to be at least £25bn each.
Hertfordshire's £3.6bn fund joins county councils for Cambridgeshire, Essex, East Sussex, Hampshire, Kent, Northamptonshire, Norfolk, Suffolk, West Sussex, and Isle of Wight council. The ten authorities submitted a collective response in February to the government's consultation on pooling that ended on 19 February.
The pool will be set up on a multi-asset basis, which the funds said would ensure the majority of fee savings would be achieved while allowing individual funds to contribute to governance.
Hertfordshire LGPS chairman, councillor Chris Hayward welcomed the opportunity to "work with like-minded funds and colleagues in developing an approach to asset pooling that will have shared principles and strong and equitable governance."
Essex Pension Fund chairman, councillor Rodney Bass said: "The ACCESS group has been established to form an asset pool which will help authorities to achieve the benefits of scale and execute their responsibilities to LGPS stakeholders, including scheme members and employers, as economically as possible while maintaining the desired level of local decision-making and control."
Essex Pension Fund director Kevin McDonald added: "It is clear that there are substantial potential benefits from a group of successful like-minded funds coming together to share the expertise they have. In addition there are already synergies in investment approach which helps funds maintain their crucial input into their strategic asset allocation and helps manage their specific liability and cash-flow requirements while delivering scale benefits."
The group said it is keen to explore LGPS-wide collaboration for the creation of a national infrastructure investment platform, which was announced in the March Budget.
It warned the government's reform programme is ambitious and the risks should not be underestimated, however.
Eight pools responded to the consultation in February which involved showing progress towards formalising arrangements with other authorities. Final submissions must be sent to the government by July with pooling arrangements to go live from April 2018.
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