Society of Pension Professionals questions government pension plans

Giannis Waymouth (Society of Pension Professionals Defined Contribution Committee)

CHANCELLOR Jeremy Hunt has announced pension fund reforms as a further step in the government’s plan to boost British business and increase returns for savers. This plans include requirements for Defined Contribution (DC) pension funds to publicly disclosure their level of investment in the UK.

Further to this announcement, the Society for Pension Professionals has today questioned the proposals.

Giannis Waymouth, Chair, Society of Pension Professionals Defined Contribution Committee, said:

“SPP understands the Government’s ambition to unlock capital for UK companies, but the announcement made over the weekend is unlikely to have the desired outcome, and it is not clear what savers or employers would be expected to do with the information.

The reporting burden as described appears to be disproportionate. This is because many DC pots are invested in unit funds – where the underlying investments may be changing rapidly. Practically, the most you could do is report on what proportion the investment manager is targeting for a fund. The actual proportion held in UK equities for a particular member’s pot will vary by member as they get older and different investment drivers come into play. Government must be careful that a new reporting obligation like this doesn’t have the unintended consequence of driving away investment from the UK due to the costs and complexity involved.”  

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