The Pensions Management Institute (PMI) has broadly welcomed the government’s plans for pension funds, acknowledging that larger funds “may lead” to better outcomes through greater economies of scale.
The PMI also said it is “interesting to see” the government include a reserve power to set binding asset allocation targets and it looks “forward to seeing the details of this in the Pension Schemes Bill.”
Although Tim Box, chair, PMI policy and public affairs working Group (pictured), commented: “Whether greater scale means that investments would actually be directed into the UK remains to be seen. For those running UK pension schemes the ultimate responsibility is to act in the best interests of members.”
Box added: “Pension funds will invest where opportunities align with long-term value and security. We look forward to seeing details of how the reserve power to set binding asset targets will work and the impact this will have on decision making.”
Box also noted: “The ambition in these proposals is large and the overall proposed timescales relatively short given the size of changes proposed. Beyond investment choices, practical implementation must be considered. Industry bandwidth to support consolidation and reform is finite, and sequencing matters.”
Box concluded that the government should not rush the process. “Rushing change risks confusing savers and undermining confidence in the system. Any reforms must be structured to ensure clarity, stability, and a smooth transition for members,” he said.
Comments