Chancellor Jeremy Hunt has announced pension fund reforms in a move he anticipates will boost British business and increase returns for savers.
The changes mean:
* By 2027 DC pension funds will disclose their levels of investment in British businesses, as well as their costs and net investment returns.
* Pension funds will be required to publicly compare their performance data against competitor schemes, including at least two schemes managing at least £10 billion in assets.
* Schemes performing poorly for savers won’t be allowed to take on new business from employers, with The Pensions Regulator and Financial Conduct Authority having a full range of intervention powers.
Mr Hunt says that by ensuring pension funds publicly disclose where they invest and the returns they offer, it will make it possible for employers and savers to compare schemes and make informed choices. The government is embarking on Value for Money pension fund reforms to improve outcomes for savers and consolidate the DC pensions market. The reforms will ensure that pension managers are focused on securing good returns for savers.
The plans are subject to a consultation by the Financial Conduct Authority and build on the Government’s Mansion House compact, that encouraged pension funds to invest at least 5% of their assets in unlisted equity.
Chancellor Jeremy Hunt said: “We have already started on a path to drive growth, unlock capital for our most promising companies and improve outcomes for savers – and these new rules mean employers and savers can see how their money is invested and how the returns compare to other schemes.”
