On the go: Plans for the UK’s second-largest local authority pension fund to swallow a local transport workers pension fund were announced on Tuesday, in a move aiming to protect member savings.
The £492m West Midlands Integrated Transport Authority Pension Fund would be subsumed within the £15.7bn West Midlands Pension Fund, subject to a consultation period.
The Government Actuary’s Department outlined concern over the future solvency of the WMITA scheme – which is a closed fund comprised of just two employers – in September last year.
“WMITA retains the specific risk arising from the majority of the fund liabilities being backed by a single private sector employer and being closed to new entrants… we do not think that any (realistic) employer contribution rate would be sufficient to achieve the solvency aim,” the GAD report said.
Responsibility for WMITA currently resides with the West Midlands Combined Authority, but its LGPS administering authority functions are delegated to the City of Wolverhampton Council, which also runs WMPF.
The proposal would see Wolverhampton formally integrate WMITA and WMPF, saving an estimated £22,000 on administration costs a year.
The council said the assets and liabilities of the two employers – West Midlands Travel Ltd and Preston Bus Ltd – will be ring-fenced separately because they “present different risks”.
The consultation runs until September 7.
