Unlocking UK pension capital for sustainable growth- Recommendations from UKSIF’s pensions review
UKSIF’s thought leadership report, Unlocking UK pension capital for sustainable growth: Recommendations from UKSIF’s pensions review, outlines a series of recommendations on behalf of our UK asset owner network- and wider members- aimed at putting the UK’s pension assets to work more effectively in the wider economy to drive positive outcomes for pension savers, while also providing benefits for the environment and society which closely underpin long-term growth. Reflecting the long-term nature of pension savings and these policy discussions, a number of our review recommendations are deliberately longer-term and we hope can be considered both over the upcoming second stage of the UK’s pensions review and beyond this.
UKSIF’s review focuses on the following areas:
- Driving investment in the wider UK economy: the opportunities to leverage pension capital and unlock low-carbon investments: this chapter cautions against a ‘mandation’ policy approach towards UK pension schemes, while highlighting opportunities to mobilise higher levels of pension capital in the wider economy through greater policy and regulatory certainty, and seizing the opportunities presented by the transition.
- Promoting positive retirement outcomes and a more sustainable, resilient pensions system: this includes new positions for UKSIF on auto-enrolment reforms and related areas to this such as the gender pensions gap and pensions adequacy. We hope to see this dialogue emerge fully shortly in the next phase of the pensions review as we look to encourage a more sustainable and resilient pensions system.
- Ensuring more effective investment decision-making: supporting pension schemes’ role in the net-zero transition: this looks at evolving existing guidance for trustees and IGCs, clarification to fiduciary duty that directly recognises the FMLC’s landmark opinion from last year, and regulation of investment consultants.
- Building a well-designed, high quality sustainable finance regulatory architecture for pension schemes: this seeks to respond to concerns on the reporting burden for schemes, particularly smaller schemes, through recommending a new industry-led taskforce on sustainable finance rules. It highlights certain frameworks (e.g. ISSB standards and transition planning) that could form the basis of the future sustainable finance architecture for schemes (with relevance also for investors at large and non-financial companies).
- Promoting a more effective and competitive wider regulatory environment for pensions: this aims to provide a sustainability lens to upcoming reforms to the Value for Money Framework, DB surplus extraction proposals, and other areas such as pensions consolidation.
