Lancashire County Pension Fund and the London Pensions Fund Authority have initiated the development of a new asset and liability management partnership.
The partnership will allow each pension fund retain its separate identity and local accountability, but could also ultimately cover all areas of activity involved in the running of the pension funds, including pension administration.
The central proposal is to create a commonly managed, jointly invested pool of assets overseen by a Financial Conduct Authority (FCA) registered entity created by the two pension funds.
Jennifer Mein, Leader of Lancashire County Council, commented: "Taking a more proactive approach to managing the assets and liabilities of the Lancashire County Pension Fund has really paid off in recent years and this new partnership will enable us to build on the expertise we have developed.”
"Facing the challenges of supporting an ageing population, the government should be using the good practice of funds like our own and the London Pension Fund Authority to drive up the performance of the Local Government Pension Scheme, rather than dumbing down to the average."
Edi Truell, chairman of the London Pensions Fund Authority, said: “We are delighted to be working on the development of this partnership and believe, with a greater pool of assets, both pension funds will gain access to a wider range of investments.”
