Reeves’ Project to Force Pension Funds Into UK Suffers Early Blow – Guido Fawkes

Reeves’ Project to Force Pension Funds Into UK Suffers Early Blow

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After delays of a week the Treasury has announced the “Mansion House Accord” with 17 pension funds this morning signing up to Reeves’ expanded version of the Mansion House Compact negotiated by Jeremy Hunt in 2023. Eleven funds signed up for that one, which committed firms to allocate 5% of their defined contribution funds to unlisted equity by 2030…

Signers-on make up about 90% of the UK’s defined contribution pensions. Reeves has doubled that 2023 requirement to 10% investment in private markets by 2030 with a requirement to put half of that in UK markets “if there is a sufficient supply of suitable assets.” An overnight release threatens that measures could be “reinforced” over time…

The Treasury has stressed since 2023 that these agreements are voluntary but there have been increasingly worried noises from funds who say that there is an underlying threat of mandated investment or punishments to be dished out to poor performers. Industry sources point out the threat of future punitive action will likely be enough to make funds play nice…

The agreement has already suffered a blow as Scottish Widows refuses today to take part despite signing up to 2023’s compact. Directing fund investment is a perversion of the free market – a source from one of the UK’s largest wealth managers tells Guido “politicians have a habit of viewing pensions as a pot of cash to play with to the detriment of their fiduciary duty to deliver a return.” Quite…