LGPS progress highlighted in Pensions UK review of Canadian funds

The report compares the Maple 8 – a group of large, consolidated public sector pension funds in Canada – with the UK’s Local Government Pension Scheme (LGPS), and identifies key similarities and differences. The UK Government’s 2024 Mansion House reforms have set out an ambition to consolidate UK pensions, particularly defined contribution (DC) schemes and the investment management of the LGPS, to enable greater investment in productive assets such as infrastructure and private equity. With more than £390 billion in assets (in England and Wales), the LGPS is already one of the world’s largest defined benefit schemes, but the Government sees opportunities for further scale and diversification.

The Canadian model is seen as attractive for its:

• Scale – enabling cost efficiency and direct investment
• In-house expertise – reducing reliance on external managers
• Governance independence – allowing long-term, depoliticised decision-making

While the LGPS shares some important characteristics with the Maple 8 – including independent governance, principles-based regulation, and no rigid investment limits – the report highlights significant differences in scale, in-house investment capacity, and diversification. The Maple 8 collectively manage over £1.1 trillion across just eight funds, compared to the LGPS’s £390 billion spread over 86 funds within 8, soon to be 6, pools.

The report emphasises that the Canadian model evolved over decades, with outcomes dependent on maintaining independence, building in-house expertise, and allowing time for strategies to mature.

Joe Dabrowski, Deputy Director of Policy and advocacy, said; “The LGPS is a great UK success story – a mature scheme delivering secure retirement benefits to over 6.7 million members, and in a really robust funding position. Similarly, the Maple 8 represent a Canadian success story, showing the advantages of scale, in-house expertise and long-term thinking.

“While the two systems are increasingly compared, they are not the same: their scale, maturity and context differ significantly. As we enter a big phase of local government pensions reform in the UK, what matters is giving it time to bed in, while carefully considering the strengths and differences between the two models.

“If the UK is to take inspiration from Canada, it should be by recognising the strengths and differences of each system, and building on what already works here, whilst keeping members’ interests at the heart of any changes.”

Pensions UK supports a structured and measured approach to reform, recognising the UK’s unique context while adopting valuable lessons from the Canadian experience. There is a need for continued collaboration between government and the industry to ensure reforms deliver long-term benefits for both savers and the wider economy.

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]