Bank of New York Mellon : The challenges for LGPS pools

Written by: Stephen Doyle | Head of Relationship Development, UK Institutional, BNY Mellon

With the target date for the UK's Local Government Pension Scheme (LGPS) pooling project just a few months away, Stephen Doyle, Head of Relationship Development, UK Institutional, outlines four current challenges for the established pools.

Last year was a momentous in the LGPS pooling project. All eight local authority pools are now well advanced in their establishment of their preferred structures and provider selections for asset servicing are almost complete. While the initial intent of the UK government was for the structures to have been established and liquid assets moved by April 2018, it now appears few pools will have completed their pooling process by then. Indeed, there is a growing realisation within the LGPS that completion of the pooling project may take several years.

The established pools face four immediate challenges:

The months ahead will provide significant challenges for the LGPS pools in terms of people, processes and procurement. BNY Mellon is uniquely positioned to advise and support LGPS pools with these challenges:

Alternative investment services. We are working with a number of LGPS pools to provide a range of solutions to their alternative investment needs. With over 20 years' experience in this space and over $825 billion in AUA, BNY Mellon is one of the largest providers in the alternative investment administration business.

Outsourcing of non-core functions. BNY Mellon provides a modular range of solutions to clients from full outsourcing including trade execution to master record-keeping solutions. Our bespoke solutions fit well with the varying needs of the LGPS pools.

Data Management. With our 100% ownership of Eagle Investment Systems, BNY Mellon provides data warehousing and outsourced data management services to asset owners worldwide. Our Eagle solutions are designed to normalise data from multiple sources.

Global Risk Solutions. Through our GRS team, we provide services to a number of the existing LGPS pension funds today and have full capability to provide consolidated reporting at both pool and individual pension fund level, all backed by a full General Ledger-based accounting system.