Pensions Schemes Bill’s asset pooling powers called into question
Author: LAPF Investments | Published: January 16, 2026
Peers have called into question powers in the Pension Schemes Bill that would allow the Pensions Minister to direct administering authorities to participate in, or withdraw from, specific asset pool companies.
The issue arose as part of several amendments proposed to the Bill earlier this week, aimed at clarifying the reasoning behind the powers. Peers also discussed how the government envisages the relationship between scheme managers and strategic authorities operating in practice.
Conservative peer Viscount Younger of Leckie, who introduced the amendments, explained that their intent was “not only [to] concern the intent of the provisions but how they will operate in practice, how they will interact with existing LGPS governance and funding arrangements, and whether [they] genuinely address the problems they are purported to solve.”
He added: “Clarity on these points is essential if we are to ensure that the Bill strengthens, rather than inadvertently weakens, confidence in the Local Government Pension Scheme.”
Peers also questioned how asset pooling would work in practice and whether forced consolidation could disrupt long-term investment strategies. Others expressed concerns that new duties to co-operate with strategic authorities could pressure funds to prioritise local or political objectives over members’ best financial interests.
In response to these concerns, government whip Lord Katz said the government shared the aim of ensuring that administering authorities continue to comply with their fiduciary duty.
He said: “I assure the committee that the government is not seeking to undermine the fiduciary duty of local pension funds in any way. The responsibility to set an investment strategy, which is the key driver of investment returns, will remain with funds.”
Specifically on the asset pooling powers, he said they were intended as a safeguard in case the scheme cannot agree on a satisfactory arrangement, with the power viewed as a backstop that would only be used as a last resort.
The amendment was withdrawn.
