Actuarial firms have been invited to bid for work advising the government on how to secure vital administrative savings in the management of town hall pensions.
Local government minister Brandon Lewis announced last week that Whitehall had started looking for input from the financial sector as part of the coalition's drive for more open policy making.
Speaking on October 18, he said: '[Last week] I launch[ed] a process to get professional advice and analysis from financial markets experts on ways to reduce the £508m investment management and administration.'
This, he said, would be achieved 'through greater joint working, [with] potential fund mergers or pooled investments and increased data transparency that will make the pension scheme more accountable to its taxpayers'.
Successful bidders could be actuarial firms, banks or think-tanks. They would be expected to have experience of pension fund management and to provide a robust cost-benefit analysis on when the potential savings could be delivered across 89 different local government pension scheme fund administrators. Proposals will be presented to both DCLG and Cabinet Office ministers for consideration. The bid closes on 21 October 2013.
The commissioned work will consider three options for reducing the LGPS's investment overheads: the provision of a single national investment fund vehicle; a small number of closely aligned combined investment vehicles; or merging of the 89 existing funds into fewer, larger funds.
Lewis said the Department for Communities and Local Government was one of the first Whitehall departments to take up the Cabinet Office's Contestable Policy Fund, which was established to enable ministers to commission policy advice from beyond Whitehall.
Cabinet Office minister Francis Maude added: 'Ministers need the best possible policy advice to ensure better public services and value for taxpayers. Because Whitehall does not have a monopoly on policy making expertise we want open policy making to become the default in government.'
