Pensions Expert picks the top stories from a busy week, from the pensions minister’s latest update on mandation, to how the biggest schemes are tackling volatility and uncertainty.
The weather in Edinburgh has been almost as diverse as the topics of discussion at the Pensions UK Investment Conference. Sheltering in the Edinburgh International Conference Centre from the wind and rain, delegates heard from politicians, asset owners, investment experts and regulators about the latest trends shaping the industry and what could lie ahead.
There is a special episode of the Always A Pensions Angle podcast, with Pensions Expert editor Nick Reeve and Thomas Parker from LAPF Investments dissecting Torsten Bell’s speech and other key talking points.
Explore the stories below, or use the drop-down menu above to navigate through our coverage.
Arguably the biggest headline from Edinburgh was pensions minister Torsten Bell’s pledge to “ensure it is clear” that the much-discussed mandation clause will be limited in its scope.
The minister argued that this had been made clear previously, but also indicated that the Pension Schemes Bill would be altered as it enters its final stages in the House of Lords.
As the government considers issuing “statutory guidance” in relation to fiduciary duty, the CEO of the UK’s largest pension scheme has welcomed the decision not to legislate.
Carol Young, chief executive of the Universities Superannuation Scheme, said: “We are very clear on our current duty to act in members’ best financial interests, and it has not constrained us from thinking about systemic issues like climate.”
As opposition to the proposed cap on salary sacrifice builds, pensions minister Torsten Bell argued strongly that the government was taking the right decision given the cost of the tax relief. He also played down the impact of the Lords amendment raising the cap to £5,000.
“The cost of pension salary sacrifice was going to triple to about £8bn by the end of the decade if we had done nothing.”
Torsten Bell
With defined contribution schemes set to receive either green, amber or red ratings as part of their VfM assessments, pension schemes and regulators alike recognise the commercial and reputational risks schemes will face if they receive a rating that is any shade other than green.
Louise Farrand reports as TPR and the FCA discuss the impact of the ratings with People’s Pension’s deputy CIO Phil Butler.
A panel of leading investment chiefs kicked off the Pensions UK Investment Conference with a discussion on current investment trends and challenges. Covering the worlds of DB, DC and the LGPS, they explained how their governance structures helped them navigate volatile situations such as the ongoing conflict in the Middle East.
Tom Parker and Nick Reeve summarise key themes from the Pensions UK Investment Conference in this special edition of our fortnightly podcast. Listen on the Pensions Expert website, subscribe via Acast, or find us wherever you get your podcasts.
Investment chiefs from LGPS Central, Nest, and the Universities Superannuation Scheme told delegates how they approach the balance of insourcing and outsourcing investment expertise and capabilities, as Louise Farrand reports.
“We must be cheaper if we are going to do anything in-house, whatever service it is.”
Jayne Atkinson, LGPS Central
Former Green Party leader Caroline Lucas and ex-cabinet minister Michael Gove went head-to-head in a sustainable investing debate this week, discussing the role of pension funds in the battle against climate change and the transition to renewable and low-carbon energy sources.
“Environmental policy and pension policy are still seen too much as separate domains, and that separation is no longer intellectually or practically sustainable.”
Caroline Lucas
Leaders of the government’s productive finance investment project were out in force in Edinburgh this week, stepping up efforts to get more pension investment into venture capital, reports Pádraig Floyd.
Senior representatives from the Office for Investment, the British Business Bank, and the National Wealth Fund sought to flesh out the investment narrative and explain why pension funds should be confident about investing in UK private markets.
An external voice is needed “to ask the difficult questions that sometimes professionals either don’t want to hear or don’t quite understand”, says Des Healy of the Department for Work and Pensions. He was speaking after the department’s consultation on trusteeship, administration and governance closed earlier this month.
Pensions UK Investment Conference
All the coverage from the three-day industry gathering in Edinburgh.
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Volatility, value, and venture: All the headlines from the Pensions UK Investment Conference
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