The £1.7bn Royal County of Berkshire Pension Fund is in discussions to join the investment pool set up by London Pensions Fund Authority (LPFA) and Lancashire County Council Pension Fund.
It comes just days before the 89 funds in the Local Government Pension Scheme (LGPS) must hand over their initial plans for pooling investments to the government.
According to Berkshire's draft response to the consultation, dated 9 February, its pension fund panel agreed that officers should continue discussions with the LPFA and Lancashire regarding pooling of assets, as well as other unnamed pools.
LPFA and Lancashire decided last year to pool their combined assets of £11bn with the aim of saving at least £32m in costs. If Berkshire came on board, this would bring the pool assets to almost £13bn, but would still be far behind the government's desire for each pool to have at least £25bn in assets.
The response signed by councillor John Lenton who is chairman of the Berkshire Pension Fund and Pension Fund Advisory Panels, said officers had already had discussions with a number of the nascent pools.
The panel's three main criteria for choosing a pool include: the ability of a pool to deliver the fund's investment strategy (modest long-term returns with low volatility of those returns to close the funding gap over the deficit recovery period agreed with the actuary); the proposed governance arrangements of the pool; and the quality of management of the pool.
The response said: "In the long run the panel are of the view that additional cost-savings would be achieved by greater integration of LGPS funds including risk management and sharing (for instance pooling longevity risk), joint investments and pensions administration."
By 19 February all 89 LGPS funds for England and Wales must present to the Department for Communities and Local Government their commitment to pooling and outline discussions with other administering authorities.
Berkshire is one of few remaining funds yet to publically commit to one particular pool.
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