The challenges facing the pensions industry are “significant”, but so too are the opportunities, Pensions Management Institute CEO, Gareth Tancred, has said, arguing that the industry must "adapt decisively and seize the opportunities these changes present". 

Speaking at the World Pensions Conference, Tancred noted that the geo-economic landscape has shifted dramatically in recent years.

“We are navigating the aftershocks of the Covid-19 pandemic, heightened geopolitical tensions, accelerating climate risks, and rapid technological transformation," he stated.

"These forces are reshaping economies, societies, and the very foundations of retirement security. As leaders, policymakers, and stakeholders, we must adapt decisively and seize the opportunities these changes present.”

However, Tancred clarified that whilst "the challenges before us are significant, so are the opportunities".

"If we get this right, we can deliver better outcomes for savers, unlock capital for growth, and ensure that pensions remain a cornerstone of financial security in an uncertain world," he stated.

Tancred emphasised that the UK in particular is at a “critical juncture” in shaping a pensions system that delivers security for savers while supporting sustainable economic growth, but acknowledged that these pressures are far from unique.

“Our challenges are global - and so must be our solutions,” he stated. “Perspectives from Australia, Canada, the US, and Europe will enrich our dialogue, because the issues before us transcend borders."

Indeed, Tancred noted that the UK has faced a shift from defined benefit (DB) to defined contribution (DC), as well as demographic pressures, market volatility, and the "urgent need" to channel capital into productive assets - all of which are issues that often impact wider global pension markets too.

"Globally, pension assets have reached US$58.5 trillion [6], and the trend toward alternatives is accelerating, with private markets now accounting for 25% [7] of global pension portfolios," Tancred said.

"Private markets offer compelling opportunities for diversification and enhanced returns."

However, Tancred admitted that the UK DC market is starting from a low base, as fewer than half of the largest multi-employer DC schemes currently have any private market exposure in their default funds.

He also clarified that whilst the PMI supports the ambition to allocate a greater proportion of DC defaults to private markets by 2030, that implementation must be "measured and transparent".

"Illiquidity, valuation complexity, and governance risks require robust oversight," he stated. "Trustees and asset managers must ensure that diversification does not come at the expense of prudence, or their fiduciary duty."

In particular, Tancred emphasised that despite support for the broader principle in the Pensions Schemes Bill, the PMI continues to have "serious concern" over provisions that would allow the government to mandate pension scheme investments.

In addition to productive finance issues, Tancred stressed that technology - particularly artificial intelligence - is "reshaping our industry".

"AI can streamline administration, reduce costs, and enhance decision-making through predictive analytics," he stated,

"But PMI's position is clear: technology should support, not replace, human judgment. Trustees carry fiduciary duties that algorithms cannot discharge. We advocate for strong governance, transparency, and accountability in AI adoption. "

Indeed, this comes just a day after the EU Commission shared its Digital Omnibus package, which was welcomed by European pension organisations, with Insurance and Pension Denmark (I&P Denmark) suggesting that the insurance and pensions industry has a "special obligation" to use artificial intelligence (AI) responsibly.

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