Department for Work and Pensions launches consultation on long-term asset planning

Department of Work and Pensions launches consultation on long-term asset planning

The Department for Work and Pensions (DWP) has launched consultation encouraging pension schemes to invest more in a wide range of long-term assets.

These products encouraged by the government will include venture capital and green infrastructure. The seven-week consultation published 11 September 2020, is an addition to the government’s response in February 2019, when they opened an initial consultation on investment, innovation and future consolidation.

These initiatives have been set out in an attempt to improve the long-term outcomes for pension members’ financial certainty. The government is additionally encouraging the consultation of smaller pension schemes transitioning into larger schemes being included in this consultation.

The full consultation titled ‘Improving outcomes for members of defined contribution pension schemes, will run from 11 September 2020 to 30 October 2020.

Guy Opperman, minister for pensions and financial inclusion, said: “We want all pension scheme members to benefit from efficient administration, first class investment governance and access to diversified investment strategies.

“The UK has a world-class occupational pension system. We want to encourage scale and innovation by pension schemes, and help drive new investment in important sectors of the economy as we build back better.

“The UK is committed to leading the way in the provision of green technology and infrastructure, and we want pension funds to be at the forefront of taking advantage of these long-term opportunities.”

David Fairs, executive director of regulatory policy, analysis and advice at The Pensions Regulator (TPR), added: “We welcome the DWP consultation on improving outcomes for members of defined contribution pension schemes.

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“The proposals call on schemes with assets under £100 million to carry out a more rigorous annual assessment of their value for members. If those schemes cannot demonstrate they offer good value, they will have to tell us whether they plan to improve or consolidate.

“This is in line with our aim to cut the number of poorly run schemes in the market so every saver benefits from being in a pension scheme with excellent standards of governance and which delivers good value.”