Barriers must be overcome to deliver pensions ‘superfunds’ plan, says RSM UK
22 June 2023
Commenting on today’s Resolution Foundation report, ‘Beyond Boosterism’, which calls for pensions ‘superfunds’ to drive investment, Ian Bell, head of pensions, RSM UK said: ‘The motives for the proposals are understandable, given the health of government finances and the need for longer term investment in UK plc. UK pension schemes are already a huge investor in government gilts in issue, and so are already playing their part in financing and backing UK plc.
‘However, the challenges in taking this project further lie in the way that pension fund wealth can be combined and accessed on an equitable basis. This needs to balance the needs of scheme members, trustees and their associated sponsoring employers. It also needs to demonstrate the value that this type of investment will bring to the individual scheme member.
‘The fiduciary aspects of the trustee’s role, to make decisions in the best interests of individual members, has been a protective measure that has been in place for decades, and this will present a big obstacle. Before anything like this is attempted, cross party agreement would have to be put in place to prevent long term pension savings once again being used as a short-term piggy bank for government ambitions. I expect trustees will, be following this debate with interest, but will ultimately be questioning the motive, and challenging the benefit that it may bring for their members.’
‘However, the challenges in taking this project further lie in the way that pension fund wealth can be combined and accessed on an equitable basis. This needs to balance the needs of scheme members, trustees and their associated sponsoring employers. It also needs to demonstrate the value that this type of investment will bring to the individual scheme member.
‘The fiduciary aspects of the trustee’s role, to make decisions in the best interests of individual members, has been a protective measure that has been in place for decades, and this will present a big obstacle. Before anything like this is attempted, cross party agreement would have to be put in place to prevent long term pension savings once again being used as a short-term piggy bank for government ambitions. I expect trustees will, be following this debate with interest, but will ultimately be questioning the motive, and challenging the benefit that it may bring for their members.’
