Man Opperman is Minister for Pensions and Monetary Inclusion
Division for Work and Pensions consults on plans to drive long-term pensions sector funding into ‘vital sectors of the financial system’ comparable to inexperienced know-how
The Division for Work and Pensions (DWP) has launched a session to enhance saver outcomes and promote funding in inexperienced know-how and infrastructure within the UK pensions trade.
The session, published today, places ahead measures to encourage pension schemes to put money into a extra various vary of long-term belongings – together with illiquid merchandise comparable to enterprise capital and inexperienced infrastructure. Views are additionally being sought on further steps to encourage the consolidation of smaller pension schemes into bigger schemes.
The DWP stated the proposals would require trustees of smaller schemes to evaluate key components of the worth achieved by their scheme and to report on the result of that evaluation. The place this evaluation exhibits that members would obtain higher worth in a bigger scheme they are going to be anticipated to provoke wind up and consolidate.
“We wish all pensions scheme members to profit from environment friendly administration, top quality funding governance, and entry to diversified funding methods,” stated Minister for Pensions and Monetary Inclusion Man Opperman. “The UK has a world-class occupational pension system. We need to encourage scale and innovation by pension schemes, and assist drive new funding in vital sectors of the financial system as we construct again higher.”
It follows plans announced as part of a separate DWP consultation last month that may require all giant pension schemes holding £5bn or extra in belongings to publicly disclose the dangers posed to their savers investments by local weather change and the web zero transition by 2022 or face penalties from regulators. The brand new guidelines would then additionally requre all schemes holding greater than £1bn in belongings to observe go well with purchase publicly disclosing local weather danger from 2023.
“The UK is dedicated to main the best way within the provision of inexperienced know-how and infrastructure, and we would like pension funds to be on the forefront of profiting from these long-term alternatives,” Opperman added.
The seven-week session, which runs till 30 October 2020, was printed alongside the federal government’s response to its February 2019 session on funding innovation and future consolidation.
The Pensions Regulator’s government director of regulatory coverage, evaluation and recommendation, David Festivals, welcomed at this time’s proposals.
“The proposals name on schemes with belongings below £100m to hold out a extra rigorous annual evaluation of their worth for members,” he stated. “If these schemes can’t reveal they provide good worth, they must inform us whether or not they plan to enhance or consolidate. That is according to our purpose to chop the variety of poorly run schemes available in the market so each saver advantages from being in a pension scheme with glorious requirements of governance and which delivers good worth.”
A model of this story initially appeared at Professional Pensions