South Tyneside Council and Northumberland County Council are setting up a shared administration service for their pension funds to improve efficiencies and benefit from greater economies of scale.
The service will be based at the South Tyneside Council's offices in South Shields and will use the services already provided by the £8.4bn Tyne and Wear Pension Fund.
The funds said in a statement that a "significant amount of work" has already been undertaken and that they should be in a position to go live in the next few weeks.
By using Tyne and Wear's service, Northumberland County Council's £1.3bn pension fund will benefit from "improved resourcing and enhanced services to meet increasingly stringent standards." The move will also enable the Tyne and Wear Pension Fund to further develop its services and improve the resilience of both funds to react to future government initiatives.
South Tyneside Council leader, councillor Iain Malcolm said: "This is an exciting opportunity to work with one of our neighbours. As the lead authority for the Tyne and Wear Pension Fund, we already have a strong pensions team. This initiative will enhance it further and at the same time make both funds more efficient."
Northumberland County Council leader, councillor Peter Jackson said: "All councils continue to face significant financial pressures, while at the same time striving to provide high quality services. By working with South Tyneside Council to provide a joint LGPS administration service we will improve resources and futureproof the service. We are convinced that the new arrangements will provide a better, more comprehensive service to the thousands of participants in the pension scheme across Northumberland."
The Tyne and Wear Pension Fund is one of the largest in the Local Government Pension Scheme and has around 130,000 scheme members and 240 participating employers.
The Northumberland County Council Pension Fund has around 26,000 scheme members and 40 participating employers.
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