Source: Agenzia Nova
Investors are calling on the UK government to reform the £1.200 trillion so-called defined benefit pension schemes to free up billions for infrastructure and real estate, the Financial Times reported. “The schemes need to be a priority: they have the potential to make money available more quickly than other sectors,” said Insight Investment’s head of solutions engineering, Jos Vermeulen. Second Owen McCrossan, head of investment for abrdn’s pension funds, a 5 per cent allocation of assets to productive assets could generate £50bn (€60,2bn).
Despite the interest in defined contribution (DC) schemes, many defined benefit plans are in a better financial position, allowing them to take on more risk. Vermeulen said this was “a once-in-a-lifetime opportunity to change the fate of the UK”. Calls for reform of the rules on these schemes come as the government has postponed a pension adequacy review, which would have included plans to increase automatic pension savings rates. Vermeulen said the reforms should be included in the pensions bill due in the middle of next year.