PLSA AC 18: Govt asks pension schemes to up infrastructure investments

The government has asked the pensions industry to consider putting more investment into infrastructure projects as it looks to remove barriers to investing in the sector.

Speaking at the Pensions and Lifetime Association annual conference today, 18 October, Pensions Minister Guy Opperman said that it wants schemes to invest beyond the “traditional equities, bonds and gilts”.

Opperman added that the moving towards consolidation and bigger master trusts would allow this to happen.

“I am excited by the work of the Treasury, with who I am working hand in glove … who are bringing radical proposals forward and compelling arguments about how we make it easier to invest in unlisted firms and other assets such as unlisted infrastructure,” he said.

“One of the things I would like to see pension schemes do more is for them to revisit their strategies. The DC scheme consolidation is gathering pase, this means we will have larger master trusts, who will be increasingly free to move beyond the traditional equities, gilts and bonds.”

Furthermore, Opperman argued that investing in environmental and climate change issues is a subject which everybody should be passionate about and that it could be a “step-change in engagement and interest” for a new generation of savers.

“Important as those assets are we want them to start looking at investing directly in firms, infrastructure and housing in a different way than on a traditional basis. It is something I am discussing with industry on a long-term basis.

“In the meantime the department will be looking at how it can remove barriers and considering what announcements can be made on the topic in the coming months.”

Last week, the local authority pension fund committed £550m to its infrastructure fund.

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