‘Major decision’ needed over the future control of a £7 billion Derbyshire pension fund

Derbyshire County Council HQ - Photo by Eddie Bisknell

A major decision needs to be made over the future control of a £7 billion Derbyshire fund.

Derbyshire County Council controls the £7.7 billion Derbyshire Pension Fund, paid into by all councils in the county and city, involving 100,000 members, including teachers, care home staff, cleaners, firefighters and police officers.

However, from April 1st, 2028, the county council and nine of the other Derbyshire councils, including Derby city, are due to be scrapped, with two new authorities for the north and south to be created.

Papers from the county council outline that a major decision now needs to be made about the future control of the pension fund, including all the contributions from thousands of residents across Derbyshire.

One of two preferred options is to pass over control to one of the two new authorities, which are yet to formally be created but will be named Derbyshire North Council and Derbyshire South Council.

This is the option chosen by councils in Cumbria, Northamptonshire and North Yorkshire with their pension funds, via local government reorganisation.

Derbyshire discloses that this option – retaining ownership by a council – allows the fund to continue to access services within the host council such as communications, digital and cyber security, HR, legal advice, payroll, procurement and office spaces.

The second of two preferred options is to pass the £7.7 billion fund to a new independent authority – called a Single Purpose Pensions Authority – with voting comprising councillors from its constituent members,

Papers detail that the South Yorkshire Pension Authority controls the £12.1 billion South Yorkshire Pension Fund, taking management off South Yorkshire Metropolitan County Council, with 12 councillors from the area’s current district councils having voting rights and three trade union representatives acting as observers.

Meanwhile, the London Pensions Fund Authority controls the £8.2 billion Greater London Council’s Superannuation Fund and the Government recently gave Surrey Pension Fund permission to create a new authority to control its £6.8 billion pot.

Surrey is a year further ahead in the local government reorganisation shakeup, with councils in that area to be scrapped and replaced with new ones from April 1, 2027.

Derbyshire says creating a new authority would mean the fund could operate more independently – minus the elected members voting on key decisions – from the councils which are some of the 400 organisations that feed into the fund.

It says the separate authority would also not have the competing demands of running a council, with more flexibility on procuring services, recruiting and retaining staff.

The Government has told the pension funds and councils that while the Secretary of State will decide on the creation of a new authority, the future management of the funds are a “local decision”.

Papers state that the county, city and eight Derbyshire district and borough councils make up 68 per cent of the pension fund, and that managing the connection of two new authorities into this fund would be a “significant undertaking”.

If the county council seeks to create a new authority for the pension fund it must submit a request by February 15, 2027 and if agreed this would be reviewed and ratified after the May 2027 elections for the new councils.

However, if the decision is to pass the fund to one of the two new councils, this request must be received by either March 1st, 2027, or September 30th, 2027.

Further assessment of the two preferred options is now due to take place.