The government wants to secure £75bn ($95.4bn) in alternative investments through a modified package of defined benefit and defined contribution plans.
As part of the government’s efforts to foster growth in the UK economy, the Department of Work and Pensions has set out how defined benefit funds can invest in alternative asset classes while ensuring benefit security and the stability of the gold bullion market. I am asking for input on whether it can be increased to .
Insight Investment CEO Abdallah Naufal said in an emailed statement: “We believe the best way to protect the UK and the UK pension system is to create a more favorable environment for the DB pension system by reforming the legislative and regulatory framework to keep it operational. Economic efficiency and member benefits. “
“The DB Pension Fund surplus has the potential to generate over £300bn of investment in the UK economy, which will boost the UK capital markets. This is a once-in-a-generation opportunity. and the surplus of the pension system will certainly live up to its potential,” he added.
Nine UK defined contribution plans have agreed with the government to divert 5% of default funds to UK private companies by 2030.
Leah Hollingworth, head of UK retirement at Franklin Templeton, said in a separate email comment that investments in alternative assets such as private equity are driving DC plans, especially as the number of publicly traded companies is declining. will have access to a wider variety of companies, he added.
Hollingworth also welcomed talks by the government on whether municipal pension scheme funds should increase their allocation to private equity to 10%.
Also on Tuesday, the government released further details on the operating rules for the DB Superfund, which targets employers and trustees sponsoring DB plans where acquisition is not an option. Permanent regulation of superfunds will be implemented “as soon as Congress time permits,” the paper said.
Nicholas Clapp, business development director at TPT Retirement Solutions, a £10.3bn multi-employer DB/DC scheme in Leeds, UK, welcomed plans to formalize Superfund rules.
“For the pension industry to evolve, the new regime must find ways to quickly overcome the regulatory hurdles that prevent participation in superfunds at both the organizational and transaction level. Pension benefits will clearly increase, the number of schemes successfully transitioning to Superfunds.”
The Government also appreciates the “investment decision culture” and wants to better understand itself on the fiduciary responsibilities of retirement trustees across DB and DC schemes, a move the Pensions and Life Savings Association welcomes bottom.
Additionally, the government has proposed introducing a consolidation model for very small DC plans that automatically consolidates dormant pots under £1,000.
In response to the proposal, Phil Brown, policy director for the £21 billion People’s Partnership, which provides a national pension in Crawley, UK, said in an emailed comment: “If this proposal is effectively implemented and provided with the right instruments, the parameters and regulatory framework will go a long way in solving a problem that will only get worse if not properly addressed,” he added. rice field.