Pooling Progress - Part 3 (costs and savings)

Part of assessing how well pooling is going is the progress made towards transitioning funds over to the pool, which is covered in our first two posts. 

Other ways to assess how well pooling is delivering for funds involve looking at the costs and savings, and also the performance of the investment portfolios.  Although the initial purpose of pooling was to achieve fee savings by economies of scale, the performance of the portfolios is a far more dominant factor in whether funds have financially benefitted from pooling.  However, while we can compare costs and savings to the original business case, which was submitted to Government in 2015, it is not really possible to compare what investment performance might have been if we hadn't pooled.  Therefore, here, it's best to assess how the pooled portfolios are doing against their respective benchmarks.

The following graph shows how actual costs and savings have built up over time.  It also includes projections for the next couple of years.  These have been made on the assumption that ongoing costs remain static, and that the savings increase to around £3m per annum, following the transition into the pool of our £400m property portfolio on 1 April 2022.

Graph showing costs and savings of pooling

This graph shows that we project that we will breakeven from pooling during 2023/24.  Things have moved on a long way since we submitted the original business case to Government back in 2015, but in spite of additional cost pressures and the delay to transition caused by the COVID-19 pandemic (and the associated market volatility), we are still on track to breakeven only one year later than originally intended.

We hope you have enjoyed our series of posts reflecting on our journey to pool our investments.  For more information on our investments, please visit our investment pages:  https://www.wiltshirepensionfund.org.uk/investment-pages