The government has today opened a call for evidence from industry as part of its pensions investment review.
In August, Chancellor Rachel Reeves launched a landmark pensions review the first phase of which is set to look at boosting investment, increasing saver returns and tackling waste in the pensions system.
Minister for pensions, Emma Reynolds was appointed to lead the review which will focus on DC workplace schemes and the local government pension scheme.
In the initial stages of the review, the government will consider evidence on a range of questions, including on scale and consolidation, costs vs value and investing in the UK.
Examples of questions the government would like responses to include:
- What are the potential advantages, and any risks, for UK pension savers and UK economic growth from a more consolidated future DC market consisting of a higher concentration of savers and assets in schemes or providers with scale?
- What are the barriers to commercial or regulation-driven consolidation in the DC market, including competitive and legal factors?
- What are the respective roles and relative influence of employers, advisers, trustees/IGCs and pension providers in setting costs in the workplace DC market, and the impact of intense price competition on asset allocation?
- Is there a case for government interventions, aimed at employers or other participants in the market, designed to encourage pension schemes to increase their investment budgets in order to seek higher investment returns from a wider range of asset classes?
- What is the potential for a more consolidated LGPS and workplace DC market, combined with an increased focus on net investment returns (rather than costs), to increase net investment in UK asset classes such as unlisted and listed equity and infrastructure, and the potential impacts of such an increase on UK growth?
The call for evidence will close at 11:59pm on September 25 and responses can be submitted through survey link on the government’s website with answers limited to 500 words per question.
Calum Cooper, head of pension policy innovation, said it was “reassuring” to see the government seeking information and solutions from the pensions industry and wider sectors.
“We are particularly glad to see that the government is focusing on investment returns net of fees, as opposed to costs," he said.
"This is important as unlisted equity and infrastructure investment costs, an area the government is keen for DC and LGPS funds to invest in, are often higher."
alina.khan@ft.com
