Pension Schemes Bill (Second sitting)

Rachel Blake Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[John Milne]

I think you have answered all my questions already. We have tabled an amendment, and I would really appreciate your input on whether we could improve it or argue around it between now and when it is raised in Committee.

Roger Sainsbury: Thank you.

[Rachel Blake]

Q Thank you very much for your evidence and your considered responses. There has been a discussion about the £12 billion surplus. Have you done any research on what you estimate would be the extent of the cost of RIPA—the scheme that you have promoted?

Roger Sainsbury: That is a very timely question, because for the past couple of years, we have been working on the basis that the RIPA scheme would cost £5.5 billion. That was the estimate given to us by the PPF. Now—I might almost say hallelujah!—about three days ago, the PPF notified us that they had redone the calculation using a much superior methodology. I think it is a phenomenally difficult calculation to do, but they have redone it, and the answer now is not £5.5 billion, but £3.9 billion, or possibly a bit less. Whereas for two years we have been arguing that £5.5 billion is eminently affordable, £3.5 billion, for example, is obviously even more affordable. We do not get that much good news, but that was definitely a bit of good news we recently received. I am pleased to be able to share it with you, if you did not know it.

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

Q You said that it is a very complicated calculation. How much confidence is there in that calculation? What input has there been from your members and part of your group on the confidence of that calculation?

Roger Sainsbury: We would not have any ability to do that calculation at all. It all depends on the statistics held by the PPF of the age of all the members, the amount they have all been receiving and so on. It is way beyond us to make that calculation.

Terry Monk: I worked with FAS before FAS even came about—at the conception, rather than the birth, of FAS. The PPF and I have worked closely with them for over 20 years. I have immense trust and faith in what they do, how they do it, and what they deliver. Whenever we ask them for help, they give it to us as far as they are able.

Roger Sainsbury: I would support that. The PPF have been very helpful and I have had a good working relationship with them. I have to say, that was not always so—about three years ago, it looked as if we would be fighting a continual battle against them, but over time we have got to a really good working relationship, and they have been very helpful. In a question of challenging or doubting their ability to do this sort of calculation, when you look at the asset returns that they are getting, boy, they have got some people that know how to handle numbers, haven’t they?

[Rachel Blake]

Thank you very much.

[The Chair]

If there are no further questions from Members, can I thank the witnesses for their evidence this afternoon? I will move now to the next panel of witnesses.

Examination of Witnesses

Rachel Elwell gave evidence.

--- Later in debate ---

[Steve Darling]

Q Thank you for coming today. Reflecting on the Bill as a whole, what would you particularly like to see weakened or strengthened in the Bill? What particularly leaps out at you?

Rachel Elwell: There are some fantastic provisions in the Bill, particularly around implementing the good governance review, and the clarity of roles and responsibilities between the different parties within the LGPS. About five or six years ago, we, along with some of the other pools, commissioned some work looking at good practice internationally, so talking to about 15 others—from Australia, the Canadians, the Dutch, the Norwegians—and looking at the journey they had been on with this. They are about 15 years ahead of us, really, with that policy. We wanted to learn from what they had done.

There were various success factors, some of which Michelle shared with you earlier, but one of those was real clarity about the Government’s policy intent, and I think the Bill really does help with that. That will help us, in turn, engage with our pensions committees and partner funds to make sure that we are providing a holistic joined-up view. There are some areas in the Bill where, particularly for the LGPS, the detail will be in the regulations. I would just make a plea, given the timelines we are working towards, that we see the regulations sooner rather than later, please. I have already said that I think it would be helpful to maybe get a bit more clarity on the circumstances in which we may be directed by the Secretary of State.

[Rachel Blake]

Q I used to be on a local government pensions committee, so I bring some of that experience to this question. The Bill talks about the merging of funds and what benefits that could have for savers and members, but it does not talk that much about administration. What impacts do you think that might have on local government pension administration—either positive benefits, or what risks you foresee that perhaps the Committee should consider?

Rachel Elwell: The primary focus of the Bill is the consolidation of the assets in pools, but there are provisions, particularly when we see some of the wider things that are happening in policy such as local government reorganisation, where that might lead to closer working between funds and potentially merger. I am fortunate enough—I think Roger Phillips mentioned this earlier—that Tyne and Wear and Northumberland are part of the Border to Coast pool, so I was there and living that experience with them personally. They were working very hard together, with very joined-up thinking and close relationships, and it was still fairly hard work.

I suppose from that perspective, like any merger of entities, it comes down to relationships and people. Administration in the LGPS is complex, and many funds have been facing recruitment challenges. What we are seeing already is funds working closely together. For example, again within Border to Coast, Tyne and Wear has recently taken on the administration for Teesside, bringing it in-house. It was previously an outsourced arrangement. There are benefits from that, but it needs to be done very carefully and thoughtfully—it is not something we should rush at.

[The Chair]

If there are no further questions from Members, I thank the witness for their evidence, and we will move on to the next panel.

Examination of Witness

Torsten Bell gave evidence.