Pension funds to be forced to disclose levels of investment in UK businesses
Pension funds will have to show how much they invest in UK businesses compared to overseas ones, according to new Government plans.
The Government believes these changes will help bosses and savers make better choices by comparing different schemes. Since the start of automatic enrolment, there's been a big increase in money going into UK pension funds - from less than £90 billion in 2012 to around £116 billion in 2022, says the Government.
At the moment it's hard for savers and policymakers to know where this money is invested because the rules about what defined contribution (DC) pension funds vary and don't always include details about UK investments.
By 2027, all DC pension funds will have to say how much they've invested in UK businesses, as well as their costs and the money they've made after expenses. Pension funds will also have to compare their performance with at least two other schemes that manage at least £10 billion.
If a scheme isn't doing well for its savers, it won't be allowed to take on new business from employers, says the Government. The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) will have the power to step in. The Financial Conduct Authority (FCA) is looking at new plans that could change how pension funds invest. These ideas are based on the Government's Mansion House agreement, which wants pension funds to put more money into businesses that aren't listed on the stock market.
Killer dances in his victim's house with twerking model who later turned on him
Chancellor Jeremy Hunt said: "We have already started on a path to drive growth, unlock capital for our most promising companies and improve outcomes for savers and these new rules mean employers and savers can see how their money is invested and how the returns compare to other schemes. British pension funds appear to contribute less to the UK economy than international counterparts do as they invest less in our domestic businesses. These requirements will help focus minds on how to improve overall returns and outcomes for savers."
Work and Pensions Secretary Mel Stride talked about the success of automatic enrolment in pensions, saying: "The incredible success of automatic enrolment has opened up a huge opportunity to grow the economy, boost British businesses and fuel our futures. It has helped us transform the pensions landscape over the last decade."
He added: "And our Value for Money framework will take this one step further, focusing pension managers on their number one priority securing the best possible returns for savers as well as providing a boost to the wider economy."
Julia Hoggett, who is the CEO of London Stock Exchange plc and leads the Capital Markets Industry Taskforce, said: "Pension holders should know how much is being invested in equities in their home market."
James Ashton, the head of Quoted Companies Alliance, stated: "We welcome these new disclosures and hope they are the first step to many UK pension funds discovering the numerous high-potential companies whose shares are traded on their doorstep."
City of London Corporation's policy chairman, Chris Hayward, stated: "The Mansion House Compact aims to channel long-term capital from pension funds into growth companies. It will support high-growth companies to start, scale and stay in the UK. We welcome the Government's action to support this objective which will turn the dial to drive investment into UK businesses."
Phil Brown, policy director at People's Partnership providing the People's Pension, shared his thoughts by saying: "It was only a matter of time before the proposed value for money framework developed teeth. This could be very challenging for some, but the Government has long signalled its intention to consolidate the workplace pensions market and drive better value for savers."
Lastly, Yvonne Braun, who is in charge of long-term savings at the Association of British Insurers (ABI), voiced her opinion saying: "Focusing the pension system on value rather than cost alone will be hugely beneficial for savers. A consistent, joined-up and measured approach to value for money should help employers, and ultimately savers, understand where their pensions are invested, compare different schemes and make informed choices."
Laura Myers, a big boss at pension experts LCP, said: "Pension fund trustees need to be able to invest their members' money where it will provide the best returns. More transparency is welcome, and many trustees would like to invest more in the UK if the right investments were available. Indeed, we have already worked with many schemes to add private market investments. But the most important focus must always be to deliver the best pensions for savers."
Read more similar news:
Comments:
comments powered by Disqus
