The Wales Pension Partnership is launching an investment company that will pool £25bn (€29.5bn) to deliver growth as part of the UK government’s Plan for Change.
The company will consolidate assets of 22 local authority pension funds, representing 412,000 members, and, according to the government, will be “the biggest pension fund in Welsh history”, capable of delivering huge investments felt first-hand by businesses and communities in Wales.
The government said that by setting up this investment company in Wales, the fund’s investment decisions can reflect the country’s unique cultural and economic climate, collaborate with local businesses to invest in communities, and deliver growth.
To see an example of this, the government said that minister for pensions Torsten Bell has today visited Uskmouth Power Station which has benefited from £6.5m of investment from the WPP for its redevelopment from a coal fired power station into a sustainable energy site – supporting 300 new full-time jobs during construction driving economic growth and prosperity for the community.
The site, once a coal-fired power station, is being repurposed to provide up to 460 megawatt hours of electricity storage capacity for the National Grid and bring a retired rail line back into service to deliver materials, saving nearly 8,400 heavy goods vehicles from the local road network.
The government added that the investment “embraces the spirit of change” it has asked to see from Local Government Pension Scheme (LGPS) pools with the wider pooling process for the UK’s world-class LGPS set to conclude in March 2026.
It added that reforms will see the LGPS “punching its weight globally”, while bringing benefits to local communities through dedicated investment strategies and improving transparency for its members.
The government added that the reforms will ensure the LGPS is fit for the future, and boost investment to drive the economic growth and prosperity promised by the Plan for Change.
Bell said: “Pensions are a massive part of the economy – and we’re seeing this brought to life here in Wales, where a successful Local Government Pension Scheme is investing in the right places to drive opportunity and growth for the local community.”
He added: “Making sure everyone can benefit from the potential of larger pension pools ties into the ambitions of our Plan for Change to boost investment in communities across the country, bringing long-term economic benefits.”
The Wales Pension Partnership added that its investment in Uskmouth Battery Energy Storage Systems demonstrates the pool’s ambitions to attract investment into crucial Welsh infrastructure and secure national energy supplies.
The pool added that Uskmouth Battery Energy Storage Systems is “one of many projects” it has in its investment pipeline, which it plans to unveil over the next 12 months.
Fit for the future
The news follows a consultation on the future of LGPS put forward by the government in November to reform the structure, investment and governance of the LGPS in England and Wales, with the government saying it wanted all individual pension funds’ assets to be transferred to pools and for these to have internal management capabilities, regulated by the Financial Conduct Authority (FCA).
Pools and the rest of the industry had until mid-January to respond to the government’s consultation. By the beginning of March, the pools, working with their partner pension funds, had to deliver a report setting out how they intend to meet the government’s proposed requirements.
Six out of eight LGPS pools have been given the go-ahead for their proposals. ACCESS and Brunel Pension Partnership were told their proposals did not make the cut and that they would need to merge with another pool instead of pursuing their individual transition plans.
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