The Treasury said today to the FT:
“The government will take a reserve power in the Pension Schemes Bill to set binding asset allocation targets.”
Officials confirmed this could include specific allocation targets for UK assets.
UK investment compulsory ;mandate as a backstop (1)
Rachel Reeves has confirmed she will create a “backstop” power to force large pension funds to back British assets, as she vowed to unleash more than £50bn of investment in domestic infrastructure, housing and fast-growing businesses.
“The government will take a reserve power in the Pension Schemes Bill to set binding asset allocation targets.”
DC mastertrusts to operate at “megafund level”
Officials confirmed this could include specific allocation targets for UK assets. At the heart of the reforms is a requirement for all multi-employer defined contribution pension schemes and local government pension scheme pools to operate at a “megafund level”, similar to those in Australia and Canada.
Ten years to make it to megafund or else (2)
The Treasury said schemes worth more than £10bn that are unable to reach the minimum size requirement by 2030 will be allowed to continue operating, as long as they can demonstrate a clear plan to reach £25bn by 2035.
This suggests a lot of consolidation between master trusts in years to come but it’s an easing from what was suggested late last year.
Investment shift to be shared by master trusts and LGPS (3)
The Treasury said the Mansion House pact would release £25bn for UK investment by 2030, while a similar amount would come from local investment targets from local government pension schemes.
“Over reach” says Mel Stride from the opposition bench
Shadow chancellor Mel Stride said:
“By pressing ahead with their plans to mandate pension-fund investments, Labour is crossing the Rubicon into directing the public’s savings. This is an extraordinary over-reach.”
Aviva and Insurance sector don’t like it much either
Amanda Blanc , CEO of Aviva clearly doesn’t like her company or the insurance and asset managers she is part of , having to do what they are told (mandation).
Blanc said this month that forcing funds to buy UK assets would not be “the right thing”, adding: “It’s like using a sledgehammer to crack a nut.”
