Greater Manchester Pension Fund
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| Greater Manchester Pension Fund | |
|---|---|
| Name | Greater Manchester Pension Fund |
| Type | Local government pension scheme fund |
| Established | 1974 |
| Location | Manchester, England |
| Assets | £(varies) |
| Members | (varies) |
Greater Manchester Pension Fund is a major local authority pension fund administered in Salford and originating from reforms in Local Government Act 1972 and Local Government Act 1974. It serves public sector employees in metropolitan Greater Manchester, working with bodies such as Manchester City Council, Salford City Council, Tameside Metropolitan Borough Council, Bolton Metropolitan Borough Council and Trafford Metropolitan Borough Council. The fund has been involved in high-profile investment decisions affecting institutions like BT Group, Royal Mail, Rolls-Royce Holdings, HSBC, and Unilever.
History
The fund traces its origin to the reorganisation of English metropolitan counties under the Local Government Act 1972 and institutional shifts tied to the Local Government Act 1974 and subsequent pension regulation such as the Pensions Act 1995 and Public Service Pensions Act 2013. Early asset growth paralleled privatisations overseen by the Conservative Party (UK) governments of Margaret Thatcher and John Major, affecting holdings in companies like British Telecom, British Gas, and Water Service (England and Wales). The fund’s evolution included responses to market events such as the 2008 financial crisis, the European sovereign debt crisis, and the COVID-19 pandemic which influenced asset allocation toward alternatives like infrastructure tied to Manchester Airport Group and property in City of Manchester. Governance reforms echoed recommendations from reports like the Lawson Review and guidance from bodies including the Local Government Association and the Financial Reporting Council.
Structure and Governance
The fund is administered by Tameside Metropolitan Borough Council acting as the administering authority for the scheme across multiple local authorities including Bury Metropolitan Borough Council, Oldham Council, Rochdale Metropolitan Borough Council and Stockport Metropolitan Borough Council. Its governance framework aligns with statutory rules derived from the Local Government Pension Scheme (LGPS) regulations and oversight from the Department for Work and Pensions and HM Treasury. Decision-making involves an investment panel, employer representative groups, and trades union observers such as Unison, GMB, and Unite the Union. External advice is provided by consultants from firms like Mercer (company), Aon (company), and asset managers including BlackRock, Legal & General, Schroders, and Aviva Investors.
Investments and Asset Allocation
The fund has diversified holdings across listed equities (UK and international), fixed income, property, infrastructure, private equity, and passive strategies using providers such as State Street Corporation, Vanguard Group, and BlackRock. Equity portfolios have included stakes in FTSE 100 companies such as BP, GlaxoSmithKline, Barclays, and Tesco. Infrastructure investments have involved projects associated with National Grid plc and transport assets like Manchester Metrolink extensions. Property exposure spans commercial assets in central Manchester and regional retail assets impacted by trends related to John Lewis Partnership and Marks & Spencer. The fund has used pooled vehicles established with institutions like London CIV and engaged in co-investments alongside Local Pensions Partnership and Border to Coast Pensions Partnership members.
Funding and Contributions
Funding follows actuarial valuations conducted by firms such as Mercer (company) and Barnett Waddingham under guidance from the Government Actuary's Department. Employers in administering bodies including Bolton Metropolitan Borough Council, Manchester City Council, Salford City Council and scheduled bodies contribute alongside employees represented by Unison and GMB. Valuations respond to market conditions exemplified by events like the 2008 financial crisis and monetary policy set by the Bank of England. Contribution rates and deficit recovery plans are influenced by legislation such as the Public Service Pensions Act 2013 and accounting standards set by the Financial Reporting Council.
Benefits and Administration
Benefits are provided under the Local Government Pension Scheme (LGPS) rules, with accrual, revaluation, and pension age provisions affected by national reforms linked to the Pensions Act 2011 and Public Service Pensions Act 2013. Administration interfaces with systems used by other funds and software vendors such as Heywood (company) and Aquarius (software), and engages with national initiatives from the Pensions Regulator and Money and Pensions Service. Members include current employees, deferred members, and pensioners from employing bodies like Oldham Council, Rochdale Metropolitan Borough Council, and Stockport Metropolitan Borough Council.
Corporate Governance and Stewardship
The fund has active stewardship policies aligned with UK Stewardship Code principles and engages with institutions such as the Financial Reporting Council and investor groups including the Local Authority Pension Fund Forum. It has pursued shareholder engagement on issues involving companies like BP, Shell plc, Rio Tinto, Glencore, and Royal Dutch Shell over topics tied to climate risk, executive pay, and corporate strategy. Proxy voting and engagement have been coordinated with custodians and managers including BNP Paribas Securities Services and State Street Global Advisors.
Controversies and Criticisms
The fund has faced scrutiny over investments in fossil fuel companies amid pressure from campaign groups like Friends of the Earth, 350.org, and Greenpeace and scrutiny in local politics from parties such as the Labour Party (UK) and the Green Party of England and Wales. Controversies have also included debates over investments in companies implicated in ethical controversies such as Boohoo plc supplier concerns and supply-chain issues connected to Rana Plaza-era reforms. Criticism has arisen regarding transparency, asset manager fees charged by firms like BlackRock and Legal & General, and the pace of divestment versus engagement debated in forums including the Local Authority Pension Fund Forum and local council meetings of Manchester City Council and Salford City Council.