Mayor Michael Bloomberg has announced a plan to consolidate management of New York City’s five pension funds.

The plans have combined holdings of about $120 billion.

Until now, each fund has been governed by a different board. Under the plan, there will be one board for all of them.

Bloomberg, city Comptroller John Liu and labor leaders announced Thursday they’ve reached an agreement in principle to make the change.

The mayor says the consolidation will bring better investment returns.

The five funds have separately served retired teachers, police officers, firefighters and other city employees.