Response to DWP Consultation on Investment Innovation and Future Consolidation
The proposals outlined in the consultation are a 'good step forward', but need clear guidance and sanctions for them to have a positive impact
Darren Philp, Smart Pension’s Director of Policy and Communications, said:
On illiquids
“There is no doubt at all that encouraging investment in illiquid assets and improving value are important themes in driving better outcomes for savers in the workplace. While we broadly welcome the Government’s ambition and proposals, what is currently on the table will only have limited effect if these types of instruments do not fit into the individual scheme’s strategy, and that includes cost.
“If and when requirements are put on schemes, we would encourage the Government to provide clear guidance as to what is expected to help scheme governance meet policymaker’s expectations.”
On the proposals for scheme consolidation
“It’s implicit that scale, efficiency, and good governance are important in DC pensions to drive better member outcomes.
“The proposals outlined in the consultation are a good step forward, but need clear guidance and clear sanctions for them to have a positive impact. All workplace pension savers deserve to be in schemes that are well-run and offer great value for money.
“We encourage DWP to grasp the nettle and be even more proactive in forcing consolidation where it is in the members’ interests. While this initially will be a lot more effort for The Regulator, longer-term it will reap significant benefits in securing better member outcomes and making it more efficient for The Regulator to regulate effectively. Similar standards should be applied to single employer trusts as well.”
About Smart Pension
Launched in 2015, Smart Pension now exceeds £10bn in Assets Under Management (AUM) and serves over 2 million members and 100,000 employers. It is powered by Keystone, Smart’s global savings and investments technology platform.
Aquiline, Barclays, Chrysalis Investments, DWS Group, Fidelity InternationalStrategic Ventures, J.P. Morgan, Legal & General Investment Management, MUFG and Natixis Investment Managers are all investors in Smart Pension.
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