UK consultant looks for Canada-inspired pension fund model to boost investments
Date
8/12/2024 6:00:37 AM
(MENAFN) UK Chancellor of the Exchequer Rachel Reeves recently engaged with senior pension fund executives in Toronto, aiming to develop a model for large pension funds in the UK to invest in domestic stocks and infrastructure in a manner similar to Canadian practices. Reeves' objective is to harness the investment potential of the £360 billion national government pension scheme, which currently comprises 86 separate funds across England and Wales. If consolidated, this scheme would rank among the world's top ten pension funds by size.
Reeves envisions replicating the success of Canada's "Maple 8" mega-funds, which are renowned for their ability to invest in substantial assets like critical infrastructure due to their large scale. This integration of UK pension funds, however, presents a significant challenge. The former Conservative Chancellor, Jeremy Hunt, also aimed to create a similar Canadian-style pension model in the UK but faced slow progress.
To address this, Reeves has initiated a review led by the new pensions minister, Emma Reynolds, to explore how consolidating pension schemes and leveraging these funds could enhance UK economic growth. The forthcoming pension fund bill is expected to focus on creating "value for money" and improving outcomes for savers. While Reeves has not supported mandatory investment in specific asset classes, her allies indicate ongoing discussions about the fiduciary responsibilities of pension schemes to act in the best interests of their members.
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