Laid in early June, the Pensions Bill is wide-ranging with policies aimed at closed corporate defined benefit schemes, the LGPS and auto-enrolled workplace schemes. These represent ambitious reforms aimed an improving the system and the retirement income of scheme members.
Chris and Charlotte unpack the implications of the pensions bill for the LGPS with assets to be consolidated in six pools and the continued focus on local investment. They discuss the advantages of scale and impact this has on relationships with asset managers as well as how diseconomies of scale emerge when a fund becomes too large.
The Bill includes a recommendation for auto-enrolled pension schemes to offer a default retirement income. Chris and Charlotte talk about the investment challenges pension providers need to solve to ensure members don’t run out of money in their life time as well as the operational challenges.
They also welcomed a value for money framework but note this will need to be navigated carefully to avoid too great a focus on short-term performance. The government’s ambition to consolidate small pots is also to be welcomed.
Finally, Chris and Charlotte discuss the implications of Reform’s strength in the recent local government elections and what implications this will have for pools’ fund selection in the future.
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