The majority of UK pension schemes want complete freedom over the investment decisions they make on behalf of members.
The survey, conducted by the Pensions and Lifetime Savings Association (PLSA) ahead of its annual conference, found that two-thirds of DC schemes thought this was crucial to ensure good outcomes for members. The figure was even higher among DB schemes, with 75 per cent wanting investment autonomy.
This issue has become more important following government intervention, via the Mansion House compact, which aims to boost DC investments into less liquid assets and productive finance. Although this remains a voluntary agreement, it does invite schemes to commit to investing a fixed proportion of their assets into private assets and start-ups to help boost the UK economy.
However schemes were not opposed in principle to the idea of increased investments into private assets and the UK economy; but they want to ensure these investment decisions based on member interests, not government targets.
The PLSA survey showed seven out of 10 pensions funds (70 per cent) expressed a willingness to increase investments in UK companies, particularly if the government introduced targeted fiscal incentives for such investments.
Additionally, the PLSA found a significant portion of savers (67 per cent) believed that the government should provide these incentives.
Last year the PLSA welcomed the government’s LIFTS initiative which ams to attract investment money into promising life science investment opportunities. The PLSA has previously said it hopes the government will consider more action in this area.
There has also been renewed focus on how pension schemes can invest into companies that are ‘greening’ the UK economy, enabling the UK to meet net zero targets.
The PLSA survey found that few pension funds believe the government has adopted the right strategy to date, to attract pension funds investment into the green transition. Just 14 per cent of DC schemes, and 10 per cent of DB schemes say it has taken the right approach.
The PLSA director of policy & advocacy Nigel Peaple says: “Our latest research into pension fund investment issues reveals some interesting views from pension fund managers and savers on several of the key investment issues facing us today – investment freedom, investing in UK growth, and investing in the green transition to combat climate change. We look forward to discussing these issues in depth at our Investment Conference this week.”