Speaking to a meeting of the Pension PlayPen , Carl Emmerson, Deputy Director of the IFS said that were a future Government to mandate DC schemes make a 5% allocation of their default funds to a £50bn Government Growth Fund, he would not consider this a tax.
Emmerson went on to say he did, however, think such a strategy would likely have a big impact on how DC savers funds were invested and while the IFS pension review was not going to focus on investment strategies, it would not ignore the possible outcomes of invested funds in its current Pensions Review.
The conversation came after the FT reported Rachel Reeves supporting proposals from City of London mayor Nicholas Lyons for such a fund and for mandatory contributions if the funders and trustees of DC pensions are reluctant to invest voluntarily.
Many people think such an intervention would simply replace direct taxation with an indirect tax on pensions. I welcome the IFS taking such a straightforward position which should help reduce unnecessary noise.
You can view and download the slides from the event here.
You can watch the event here
