Stay informed with free updates
Simply register Pension industry Myft Digest – delivered directly to your inbox.
The Mayor of City of London has criticized British companies to have selected pension providers who charge the lowest fees and argue that more expensive managers who invest in alternative assets will achieve better returns.
“We have received pension plants with many equity trackers and many fixed income because it is a cheap way to do this,” said Alastair King in an interview with the Financial Times and added that the costs had been “fixed” in the industry in the past 10 years.
King, who founded Asset Manager Naisbitt King in 2006, added that pension providers could invest more in specialist areas such as infrastructure, private debts and early phase companies by collecting higher fees.
This would enable them to “achieve a transitional return on what this whole thing is”.
However, investigations by the government’s insurance mathematical department in November showed only an outperformance of the model for private markets over a period of 30 years.
The 696th mayor made the comments when he announced a new “employer pension promise” in his annual speech of the manor house on Tuesday.
As part of the pledge, 15 companies have agreed to submit a public statement to concentrate on the net income instead of selecting themselves when selecting their pension provider (Defined Contribution (DC) and applying for more transparency for private market assignments.
The signatories include Tesco, Natwest Group, Standard Chartered, Aviva, Legal and General, Schroders, Samworth Brothers, London Stock Exchange Group, Octopus Group, Phoenix Group and Aberdeen.
Many of the groups already operate their own pension systems.
The move is the latest part of the government’s attempt to make the British pension programs to invest more in assets in order to increase the sluggish economy in Great Britain and argue that it would improve the investment in this process.
Under a voluntary obligation, the Villa House Accord Signed in May, 17 of the largest DC workstation -pension providers in Great Britain have undertaken to invest at least 5 percent of their assets in the British private markets by 2030, provided that the assets were sufficiently attractive.
King said that he wanted the UK DC pension provider to invest more like in Australia, which assigned 14 percent of their assets for private equity and infrastructure, according to Think-Tank New Financial compared to 4 percent for British DC systems.
The mayor is the figurehead of the City of London Corporation, the local government of the square mile, and lives in the manor house.
His speech comes, as Chancellor Rachel Reeves has trapped back In the case of plans to shorten the money, the ISA allowance is after a violent counter reaction through the construction of companies and consumers.
King said he encouraged the Ministry of Finance to optimize the ISA system, so that they have an ISA account that drops lifelong ISAS, innovative financing -ISAS and junior Isa.
It is expected that the Chancellor focuses on increasing financial advice if she goes to City Grandees in her speech in her speech in her speech in her speech in her speech. A new pension commission will be launched shortly to find the best way to increase the amount parked for retirement.
King added to the growing number of voices that cause concerns that the recent taxes of the British government and changes to the inheritance tax rules drawn the attractiveness of the United Kingdom for High Erders and foreign investors.
The city’s mayor played the hope that the Chancellor could make a tax notice in the speech of the Mansion House, but said that he had made the government case and it was a “tacit understanding that the current situation must be changed”.
