Rachel Elwell on protecting the pensions of front line workers

As the coronavirus pandemic hit the UK, pictures of rainbows bearing the words “thank you” began appearing in windows and weekly rounds of applause broke out across the country as people showed their appreciation for key workers, from healthcare staff to bin collectors.

Rachel Elwell, chief executive of Border to Coast, has the job of making sure some of these important workers have a pension when they retire. Border to Coast, a so-called pension pool, was set up in 2018 to invest on behalf of 1m public sector workers across 11 local authorities in England.

While the pandemic sparked an unparalleled appreciation of employees who are vital to the functioning of society, Ms Elwell is also aware of the long-held view that these workers often enjoy “gold plated public sector pensions”.

Ms Elwell is blunt on the subject: a decent pension is the least they deserve after years of service to the public. “If you didn’t have something like the [defined benefit pension scheme], that burden on the state in the future would be significant,” she says via video call from her home in Hebden Bridge, a picturesque market town in West Yorkshire.

“These are the people who are on the front line of what we are going through. They have been continuing to work. And they are relatively low paid.”

Ms Elwell is thoughtful in her answers. A person who has worked with her describes her as “very competent and very knowledgeable”.

She joined Border to Coast at its foundation, recruited to bring to fruition former chancellor George Osborne’s plans for pensions pooling across England and Wales’s 88 local authority retirement funds — which form part of the overarching £291bn Local Government Pension Scheme.

Mr Osborne’s plan was to create several supersized pension pots or “British wealth funds”, delivering economies of scale and cutting running costs for the individual funds by lumping assets together.

Other countries have already taken the step. “The UK is about 10-15 years behind what others across the world have done,” says Ms Elwell. “If you look at pooling across the Scandinavia countries, in the Netherlands, New Zealand and Australia, they have taken different routes, but they are well established now and they are really bringing value to the underlying pension funds that they serve.”

Border to Coast

Established 2018

Assets under management £20bn

Employees 86

Headquarters Leeds

Ownership Public partnership (owned by 11 local government pension schemes)

The model the UK has opted for is still convoluted — there is the LGPS, the overarching scheme and one of the largest defined benefit pension funds in the world; the 88 individual funds that make up the LGPS, which sets the investment strategy; and the eight pools, which operate as collective asset managers for the individual pensions.

Ms Elwell admits it is complex, but adds: “Without starting totally from scratch it would be difficult to do anything different to what has happened, to incrementally change it. I’m not sure there would be enough value from restructuring to be worth it.”

Pooling was necessary, she says, because it gives the asset owners a stronger voice. “The UK has historically seen an imbalance develop between asset owners and asset managers. We started to see . . . a real separation of what asset owners needed and what asset managers wanted to sell.”

“Making sure asset owners have a stronger voice and are sophisticated buyers not only means you can look to negotiate fees but will also lead to proper innovation in [the asset management industry].”

Two years after its foundation, Border to Coast is now regulated as an asset manager for its 11 local authority pension schemes, including Cumbria county council, Bedfordshire Pension Fund and South Yorkshire Pension Authority. The schemes have about £50bn combined, with Border to Coast overseeing about half of that.

Pooling is working well, says Ms Elwell. As an example, she says Border to Coast was able to generate £3.5m of savings a year in fees when it launched its global equity alpha fund last year, simply because of its scale.

Using a mix of in-house investment teams and external asset managers, the pension pool has set up nine actively managed funds that its member schemes can invest in. It plans to double that number of funds over the next two years, including launching property funds, a multi-asset credit option and an index-linked gilt fund among others.

Another tenant of Mr Osborne’s plans was getting local authority pension schemes to invest in infrastructure, an asset class that can be expensive and difficult to access for smaller pension pots. Ms Elwell says her investment team is allocating £1.5bn a year into private markets, with about a half going to infrastructure. Although it uses external funds, Ms Elwell says there are plans to undertake co-investments in the future.

Being able to generate strong returns has become particularly important for pension funds globally, which are grappling with low interest rates and ageing populations. Unlike many final salary schemes, which have large numbers of retired members, the majority of LGPS members are still in work — meaning it has more time to boost its coffers.


Born September 1974, Sheffield

Total pay Not disclosed


1993-96 MA in Mathematics & Statistics, University of Cambridge

1996-97 Diploma in Statistics, University of Cambridge


1997-11 Director, PwC

2011-17 Investment office and staff pensions director, Royal London,

2018-present chief executive, Border to Coast

“That doesn’t get away from the fact that we are in a lower yielding environment and that could go on for some time,” says Ms Elwell. “That does have real implications for how to make sure the scheme remains affordable. The way that we can do that is to look for additional opportunities,” she says, pointing to asset classes such as private markets.

As the call draws to a close, the conversation turns to Leeds, the city where Border to Coast is based, despite West Yorkshire not being one of its member funds. Its location was decided before Ms Elwell joined, but it made her decision to join the pool easier: she was born and grew up in Yorkshire and despite living in London and Russia in the past, she moved back to the north of England to raise her family. “To build this asset manager in Leeds, which meant that I could be at home with kids and also building something in Yorkshire, that would add to the Yorkshire economy, that was a fantastic opportunity.”

Another factor was the job’s links with public service workers, says Ms Elwell who comes from a family of teachers.

Throughout the call, she talks about the ties with local communities and the importance of public sector work. “Because there is a million of them [underlying beneficiaries of Border to Coast], you probably have someone in your family who is a member,” says the 45-year-old.

“What we are doing is trying to make sure those pensions are sustainable and are providing incredibly important income to people themselves who have an incredibly important public service ethos.” 


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