An industry body is demanding that a £1.5 trillion “pension superfund” should be created, to tackle the growing problem of the UK’s pension deficit. The Pensions and Lifetime Savings Association (PLSA) is expected to make the suggestion as a way of addressing the looming pensions crisis.
Sky News reports –
“The taskforce is expected? to say that consolidating defined benefit schemes – with the twin aims of improving efficiency and investment returns – is the most effective means of defusing the country’s pensions timebomb… Chaired by Ashok Gupta, who led a Bank of England? inquiry into pension fund investments, it is expected to conclude that members of weaker defined benefit retirement schemes have only a 50:50 chance of receiving their full benefits… There are more than 6000 defined benefit schemes? across the public and private sectors in the UK, with a collective responsibility for paying pensions to 16 million members… In total, these schemes hold close to £1.5tn in assets… A Whitehall source briefed on the report’s contents said the PLSA taskforce would outline four options for potential reform: combining administrative functions across schemes, generating £600m of annual savings; or pooling schemes’ assets but not back office operations, which could save £250m each year… Combining both assets and administrative functions, as well as schemes’ governance ?responsibilities, could save a total of £1.2bn annually.”