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A controversial change in British legislation does not match what the ministers had promised and could affect the pension results of millions of savers, since some pension experts have warned.
The pension system, which is expected to become a law next year, suggests that the supervisory authorities give authorities to force defined contributions (DC) to invest a minimum amount in private markets.
“The provision is not classified as a reserve power and does not promise that the pension walks cannot use,” said Charles Randell, former chairman of the Financial Conduct Authority.
“This is a shame because the case for intervention does not seem to be very convincing at all. I fear that this could undermine confidence in the savings of pension.”
Power comes together with a new rule that DC programs in the workplace at work by 2030 or 2035 must have at least 25 billion GBP of assets in their default funds, provided you can show credible plans to reach the threshold in five years.
Some experts warn that the step to give the supervisory authorities the power Pension fund Investments in harmony with the volunteer Villa House Accord.
According to the agreement, 17 of the largest DC workstation -pension providers to invest at least 5 percent of their assets in the British private markets by 2030, provided that the assets were sufficiently attractive.
Zoe Alexander, Director of Politics at the Pensions and Lifetime Savings Association trade group, said that the development of the authority to apply an asset assignment test in the bill in the bill of “the voluntary obligations of the Mansion House Accord for the approval for the regulatory authority will be the regulatory condition”.
“The government previously said that it intends to keep any power power in reserve, and therefore this elaboration triggered concern,” said Alexander, adding that state interventions in investment decisions “undermine trust and possibly lead to poorer returns”.
The step is part of the wider reforms of the government to consolidate the fragmented system of Great Britain and to start growth by promoting more domestic investments by British means.
The pension regulation also announced that it is actively encouraging programs to pursue long -term investment strategies that support both the results of the members and national growth.
The authority to determine asset allocation destinations is delivered with a sunset clause from December 2035 if the standard fund must be 25 billion GBP threshold, according to which the power supply fails if it is not already used.
The government insisted that an urge to invest more DC workstation funds more in private markets that would improve savers, but research from its own insurance mathematical department shows only a minor outperformance of portfolios with private market stocks.
A person who was the thinking of the Ministry of Finance near Treasury said that the powers of allocation mandate is not automatically used in addition to approval for the default funds of 25 billion GBP.
They said that the department was aware that the clauses in the legislation were “not sufficiently clear” on this point and that they would change if necessary.
The Ministry of Finance said that the authority to determine asset allocation destinations was “as a backstop” and added: “We do not expect that we have to use it because we are confident that the plans are now in the right direction to concentrate a larger focus on diversification and plant returns for savers.”
