The Chancellor has announced reforms to pension funds disclosures in an attempt to increase investment in UK businesses and improve performance for savers. The reforms proposed include that:
- DC pension funds will be obliged by 2027 to disclose publicly the level of their investment in UK businesses in contrast to overseas businesses.
- pension funds will have to compare publicly their performance data against at least two competitor schemes that manage a minimum of £10 billion in assets.
- poorly performing schemes will be prevented from taking on new business from employers, giving a full range of intervention powers to TPR and FCA.
The changes proposed by the Government seek to provide better value for money for savers and, by requiring public disclosure of investments and returns, allow employers and savers to compare schemes and understand better where their money is invested. The reforms are also aimed at supporting the Government’s Mansion House Compact commitment when it encouraged DC pension schemes to invest at least 5% of their assets in UK unlisted equity, to increase investment in domestic businesses.
The Government has not given further details about how these will be implemented in law, but outline that prior to implementation, FCA will be leading a consultation on the reforms.