Brunel and ACCESS told to merge with other pools

Two Local Government Pension Scheme (LGPS) pools, ACCESS and Brunel, have been instructed by the government not to implement their transition plans—effectively requiring them to merge with another pool, Room151 understands.

Pensions minister Torsten Bell and local government minister Jim McMahon have told two of the largest LGPS pools in the country, the ACCESS Pool and the Brunel Pension Partnership, to explore options to merge with other pools, ACCESS and Brunel confirmed. Meanwhile, ACCESS and Brunel partnerfunds have been told to consider seeking a new home.

The two pools now have until June to provide the Ministry of Housing, Communities and Local Government and the Treasury with an update. A further meeting with the government is scheduled for September, at that point, funds will have to provide the government with an in principle decision on which pool they intend to join.

Each pool has received a letter outlining whether they meet the criteria of the Fit for the Future consultation. The 86 individual LGPS funds have also been informed of the decision, which was communicated on Wednesday night.

Northern LGPS and the Wales Pension Partnership, both of which are not yet authorised by the Financial Conduct Authority (FCA)—have been given the green light to proceed with their business plans. The other pools, Border to Coast, LGPS Central, London CIV and LPP have been approved.

A spokesperson for the government told Room151: “This government is determined to drive growth through our plan for change, including by taking advantage of scale and consolidation in our pensions system to unlock more investment, leading by example in the public sector.

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“By 2040 the LGPS is projected to reach £1trn in size – we must ensure the scheme is fit for the future. We have a duty to ensure every penny of members’ hard-earned money is well invested, and that the full scope of benefits the LGPS’s extraordinary scale are being harnessed and maximised.

“We will continue to engage closely with administering authorities and pools on how they will meet this ask,” they added.

Disappointment

The ACCESS Pool expressed its disappointment with the government’s decision, warning that a forced pool merger would generate more than £100m in transaction costs.

“ACCESS notes with concern that the government’s rejection of our proposal attempts to downplay significant cost considerations—without supplying its own analysis or counterfactual evidence—nor proposing a framework for how costs will be compensated in the event of undesirable pool or fund-level mergers,” the pool said, adding that all avenues were now being explored.

Laura Chappell, CEO of Brunel said that the pool and partner funds were now in discussions to consider their next steps. She described Brunel as “a pooling success story”, adding “our partnership has succeeded across multiple agendas since inception: transition of assets, governance, asset class range, Responsible Investment, and UK impact”.

The decision has also been met with criticism from Brunel’s partner funds, who argue that a forced merger would not address the challenge of some individual funds failing to merge their assets.

“This is really going to upset staff at the pools and will be hugely destabilising. You might end up with a situation where staff leave the pools and individual funds decide to withdraw from their pool too,” they warned.

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A spokesperson for another Brunel fund emphasised that the pool and funds had so far had a very good working relationship and they expected this to continue going forward.

Brunel funds also noted that the measure risks undermining the successful place-based investments they have already undertaken.

Both Brunel and ACCESS now face a dual challenge: any pool merger must be approved not only by their own partner funds but also by those of the pools with which they are expected to merge. ACCESS inferred that a merger with either LPP or Border to Coast is now most likely but warned that significant costs and risks could be associated with such a merger.

The individual funds in Brunel and ACCESS now face the question whether they intend to stay and fight the decision, or if they leave their pool and find a new home. The latter raises the question whether they will become a shareholder of their new pool or a partner.

At the time of writing, Berkshire is the only pool in the LGPS which is not a shareholder but has a client status, having joined LPPI later down the line in the original pooling process. Border to Coast has told Room151 in the past that it would be open to consider applications from individual funds and that they would be expected to participate as active shareholders.

Room151 understands from industry sources that the Treasury has acknowledged that given the circumstances, meeting the March 2026 deadline to pool all listed assets could become difficult, though it has not specifically mentioned an extension.

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