HSBC Securities has won the first contracts under the new National LGPS (local government pension schemes) Framework for Global Custody Services, with the Norfolk, Suffolk and Hackney Pension Funds conducting a joint call‐off exercise and appointing the bank to provide custody from October of this year.
The three LGPS funds, with combined assets of £5.2 billion, decided to work together using the LGPS Custodian framework for the procurement, which helped them achieve the greatest overall value by leveraging the aggregate size of the funds. The funds worked together to define their service requirements, evaluate the responses and agree on a single provider, and each then contracted separately with HSBC Securities.
Over the lifetime of the contracts, the three funds estimate the total savings to be around £1.25 million, plus £0.25 million in savings in procurement costs alone.
“Working together has delivered a great value for money outcome for each of our funds, but wider benefits for each of us also as we shared our ideas and experience to help identify the right solution for each of us,” says Jill Davy, head of Financial Services at the London Borough of Hackney.
“HSBC Securities offers us competitive and transparent pricing together with a comprehensive custody and reporting solution and strong relationship support, which will help each of us move forward in terms of efficiency and performance,” says Glenn Cossey, chief investment officer, Norfolk Pension Fund.
The National LGPS Framework for Custody Services are already Official Journal of the European Union (OJEU) compliant, which cuts timescales for procurement down from six-to-nine month to just a few weeks. Funds using the Framework also gain access to Mercer Sentinel’s technical analysis of capability to help match local requirements.
“Using the National LGPS Framework for this procurement has saved each fund significant time and money at a time when both these commodities are extremely precious! Our timescales were cut from months to weeks, Terms and Conditions had already been agreed, and we were supported by Mercer Sentinels technical analysis. This meant that we were able to just focus on identifying the right partner for our funds,” says Sharon Tan, specialist accountant (Pensions), Suffolk Pension Fund.
See Global Custodian’s Spring 2014 magazine article on the Framework.
HSBC Wins First Contracts Under National LGPS Custody Framework
HSBC Securities has won the first contracts under the new National LGPS (local government pension schemes) Framework for Global Custody Services, with the Norfolk, Suffolk and Hackney Pension Funds conducting a joint call‐off exercise and appointing the bank to provide custody from October of this year.