Terry Faulkner, who becomes chairman of the UK's National Association of Pension Funds (NAPF) this week, wants local pension funds to club together to form large regional funds.

Faulkner said the new funds would bring cost savings and help to revive interest in generous defined-benefit schemes, which have become too costly for employers to sponsor in the wake of heavy stock market losses. Employers are closing them in favour of cheaper alternatives, but regional funds would offer big savings in areas such as scheme administration.