TPT responds to Rachel Reeves' Mansion House speech

The Chancellor is set to confirm plans for minimum size requirements for multi-employer defined contribution schemes, and to facilitate consolidation into pension megafunds, which the government says could drive economic growth in the UK.

TPT’s CEO, David Lane, commented:

“The Chancellor has sought to use her Mansion House speech to try and harness the collective power of UK pensions. By driving greater consolidation within both Defined Contribution and LGPS markets, she has sought to create pools of capital with the power to supercharge the UK economy. While scale will inevitably create opportunity, particularly within private markets, trustees will undoubtedly remain acutely aware of their fiduciary duty obligations to their members and focus on the best opportunities agnostic of geography. We hope that the Government will continue to do its part in developing a good pipeline of investable projects in the UK.” 

“The proposed reforms to the DC pension market are particularly welcome. If we are to build on the early successes of the Value for Money proposals, we need to drive the weaker performers into the arms of the stronger. It stands to reason that good performance and effective management should attract greater inflows and the new proposals we hope will drive this. By encouraging greater scale however, we need to ensure that the fees, performance, and choice equation is augmented. While having bigger schemes is broadly a good idea, we must recognise that consolidation alone won’t solve many of the challenges we face. The Government needs to achieve a shift in buyer behaviour in the DC market with a focus on delivering high quality outcomes rather than simply driving a race to the bottom.”