The Pallister government wants the amount of cash paid to investment managers who handle public sector pensions to be cut by merging management services.

Premier Brian Pallister said right now public servant pensions are operating in silos that result in lower returns for investors. The government is challenging public-sector pension managers to band together to manage the investments as a group to cut down on fees being paid.

"It's an enormous amount of money every year and pension plan managers will appreciate I think having a better and more consistent degree of transparency," Pallister said.

The government estimates the move could result in $200 million more in returns annually that will ensure the funds remain strong.

"We would hope that this is an additional security. Our funds are in pretty good shape overall," Pallister said.

"This isn't about forcing everybody to have one pension plan. It's not about pooling everything into one pension plan. It's about respecting the different divisions among the pension plans but it is also about having our public pension funds become better shoppers, smarter shoppers when they make their investments."

Pallister said the government will be meeting with pension fund managers in the near future. They have been tasked with reporting back to the province with a joint recommendation by March next year.

Liberal Leader Dougald Lamont questioned if Pallister had the authority to ask for the changes. "There are lots of questions here – and right at the top, why is the government sticking its fingers into the management of these pensions?" he said in a news release.

NDP finance critic Mark Wasyliw accused Pallister of political interference. "We know political interference often means big paydays for well-connected insiders while average workers don't benefit. Any decision regarding the management of investment funds should be in the best interest of workers, not politicians and their friends," he said in a statement.

Pallister said Nova Scotia, Alberta, B.C. and Ontario have already merged aspects of their public sector pension plans.

In 2016, the Ontario government created the Investment Management Corporation of Ontario to lessen costs and help improve return on investments.