Pensions Minister Richard Harrington has criticised the investments of defined benefit pension schemes.

Speaking at the PLSA Annual Conference in Liverpool today, Harrington said he is wary of too much doom mongering and it is very easy for the press to report that the sky is falling in.

“I’m in very close touch with the regulator for her views on this and I’m watching things very carefully,” he said.

However, Harrington said he has considered getting together several DB schemes and asking them about their investments. He said that when looking back at things he’s made the most money on in business, pension schemes do not seem to be investing in the same things.

For example, he mentioned homes built for the purpose of renting, which he believes are a very good investment and he thought pension schemes would be “queuing up at the door for”.

He also mentioned Camelot, which is the biggest employer in his constituency, of which the Ontario Teacher’s Pension Plan is invested in.

“It’s basically guaranteed by government because it’s regulated, unless people stop buying lottery tickets but it’s the same with renting, everything has got some degree of uncertainty in it. I’m asking people what it is, why pension funds are not investing as much in these things, as a percentage of the total, as others.”

“I quite understand the need for short-term income, I do understand the difference between different types of bonds and different types investments. It strikes me that one reason could be that the industry is too fragmented, well maybe the government needs to nudge it.”

“I want hear what people think the government should do.”

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