The Parliamentary Contributory Pension Fund (PCPF), which provides pensions for Westminster’s MPs has just 1.3 per cent of its assets in UK shares.
Reports published in The Times this weekend show the relatively low exposure to the domestic stock market for this scheme, despite the Chancellor’s calls in the Budget last week for DC workplace pensions to disclose UK holdings, and potentially boost investment into the UK economy.
Hunt warned steps may be taken to boost domestic investment if these disclosures showed UK schemes failing to keep step with international best practice guidelines.
A closer look at the holdings of the Parliamentary pension scheme shows just £10m of the £784.7m fund is invested in UK equities – equivalent to 1.3 per cent.
Figures published by Corporate Adviser (to the end of 2022) reveal that the average DC workplace master trust or GPP has an average of 8 per cent of their scheme in UK listed equities — comfortably above the Parliamentary scheme.
The Lewis Master Trust has the highest exposure to equities at 34 per cent, while a number of leading schemes — including TPT and Aegon Master Trust do not have any exposure at all to the UK stock market.
Updated figures for asset allocation of leading master trusts and GPPs will be published in April.
The report also shows that the top-performing master trusts and GPPs all have lower than average allocations to the UK stock market. This has raised questions from many market commentators on whether Hunt’s proposals could impact longer-term outcomes for members and whether he is asking UK workers to potentially jeopardise investment returns to fuel UK growth, while MPs are not taking the same risk with their pensions, which remain final salary arrangements.