Do you think the LGPS is big? If so, then think about the money pouring into retirement savings over the next 10 years as John Mitchem does.
The paper in John Mitchem’s post is hard work but the table of the major consolidations of the past 12 years is fascinating to even a novice like me
and most recently.
What this tells me is that consolidation is continuing to happen and will make LGPS one of several large funds in the UK in ten or twenty years.
It will not grow in real terms as much as the big master trusts as they are young and it is mature. LGPS will pay pensions as fast as it receives contributions while the master trusts are only starting to decumulate. CDC will be the same, The DB system in the private sector may still consolidate around superfunds (if the legislators and regulators continue to cock it up), but it is consolidation of schemes that are on the way out.
My point and I think John Mitchem’s point is to think of consolidation in trillions and that will come from European (not just British) retirement saving.
TIAA/Nuveen are buying into something that they see as exciting, the savings world of which Schroders can play a part. But we have great organisations that have the capacity to grow to trillions just as TIAA and BlackRock have. I am thinking of organisations like M&G (which has in Prufund a £130bn pool that could explode). I am thinking of Aberdeen which is showing itself interested in doing different things, there are others that may grow to be £1 trillion consolidators and achieve what LGPS cannot and does not need to do.
LGPS is a big pension scheme but that’s it. If we really want to harness the wealth of the nation to make us great again, we should not be relying on it, it is not the place to go to save the country. We need to recognise that TIAA/Nuveen is doing, that there is much greater value in our DC and CDC future than in raiding our at best stable DB schemes. Our future is our youth and they are not (save for when in the public sector) relying on DB. They are relying on investment in DC and CDC growth and so should Britain.
