Less than a third of pension scheme representatives support the government’s ‘Mansion House Compact’ — designed to increase pension schemes investment into UK private equity, particularly in the bioscience and fintech sectors.
A poll of 200 pension scheme representatives found only 30 per cent are ‘broadly supportive’ of the Chancellor’s plans, outlined earlier this week.
This package of measures is designed to boost both DC and DB investment in productive finance – although this poll relates the proposals for the DB sector.
There was even less support for other government proposals put forward, specifically its plans to boost training and professionalism amongst trustees. The government has identified this as a key way to improve investment practices and widen the assets into which schemes invest. But only 4 per cent of those polled thought these measures would have the most impact.
In contrast 43 per cent said there needed be a fundamental change to the flexibility of funding and investment regulations. This was seen as the important change needed to allow more investment by DB schemes in UK growth assets.
The poll was carried out at an XPS Pensions Group online event with over 400 industry attendees.This included Work and Pensions Select Committee chair Sir Stephen Timms, and Margaret Snowdon, chair of the Pension Scams Industry Group
XPS says these results suggest broader engagement is needed on the government’s plans. It adds that the consultation on DB options is very limited, with a short time over the summer to reflect on the options.
At the same time theWork and Pensions Parliamentary Select Committee is carrying out a wide-ranging investigation into DB pensions, but this is only expected to report next year well after government plans to announce its policy in the Autumn statement.
Commenting on the results, XPS partner Wayne Segers says: “Any fundamental change to UK pension policy requires careful scrutiny and consultation to ensure that the most important outcome – protecting the savings of members – is upheld.
“UK DB pension schemes are around 95 per cent funded against insurer funding levels and have much improved security for members. We believe there are several policy changes that can help improve efficiencies in DB pensions, notably looking at rules on surplus to improve employee savings and investment in businesses.
“Our poll has showed that there are a variety of views within the industry, highlighting the importance of the government seeking a range of views through an extended consultation process. Whilst we are very supportive of a rethink in policy that can help improve outcomes for members and lead to more diversity in pension investment, we believe such fundamental change should not be rushed over the summer.”