Super Procurement: Can Corporate Schemes Keep Pace with the UK LGPS?
- Oliver Bell
- Oct 31
- 2 min read
Updated: Nov 10
ClearGlass Research reveals the ‘super-procurement’ capability of the LGPS Pools. Thanks to their collective scale and advanced negotiation leverage, LGPS Pools are consistently securing management fees that fall significantly below market median across all public market asset classes. The LGPS partner funds are saving millions of pounds in reduced asset management costs – costs that would otherwise erode member returns, and ultimately cost local authorities and taxpayers more. For example, in the Global Equity asset class, LGPS mandates are consistently charged 15bps less on average than Corporate Institutional Pension Schemes. (See Figure 1)
Figure 1: Ongoing Charges (%) by AuM for LGPS Mandates (red) vs Corporate Institutional Pension Schemes (blue) for Global Active Equity asset class; A best-fit trendline has been provided for both.
Can corporate pension schemes emulate LGPS Pools cost efficiency? The answer is yes, as some achieve comparable or even lower fees than LGPS mandates, at the same or even smaller AuM levels. These outliers demonstrate that, while scale certainly helps, access to accurate fee data and benchmarks, together with proactive negotiation, are powerful tools for improving member outcomes.
Professor Iain Clacher, Professor of Pensions and Finance, University of Leeds, commented: This analysis from ClearGlass Research shows two key facts. First, that the pooling of the LGPS has been a huge policy success and is driving value for money for the taxpayer. Second, that all pension funds should be able to drive value for money, securing member benefits, and reducing the risk that corporate sponsors will be called upon in the future to provide additional contributions, enabling much-needed corporate investment to drive economic growth.
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