Councils responsible for £180 billion of pension funds in England and Wales have overwhelmingly rejected government proposals to force them to invest in cheap, index-tracking funds, even though they were told it would save them £420 million annually in fund manager fees and trading costs.

Of the 89 council pension funds that would be affected, 38 have made public responses to a government consultation that closed on July 11. The government had recommended passive management for equities and bonds, after analysis from consultancy Hymans Robertson showed that active management had not added value in aggregate.