Last chance for government to amend Pension Schemes Bill and protect pension investors
Government must reverse decision to exclude investment trusts.
The government is approaching its last chance to amend the Pension Schemes Bill and prevent pension investors from being subject to onerous rules that dictate where and how their money is invested.
On 16 March the Pension Schemes Bill enters the report stage, when it is vital that the Lords make the required amendments to correct the clause that prohibits pension schemes from using investment trusts to fulfil any future requirement to invest in private assets.
Excluding investment trusts is bad for competition and reduces choice for pension schemes. Given the fact that investment trusts already manage more than £100 billion in private assets, spanning a broad range of the types of projects the government wants to support, their exclusion makes no sense.
Richard Stone, Chief Executive of the Association of Investment Companies (AIC)
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “Failing to correct the Bill would be a terrible misjudgement and a poor outcome for pension beneficiaries. If the government is going to mandate investment allocation, it must get it right. We therefore urge the House of Lords to take this last opportunity to fix the Bill and make sure pension schemes have the option of using investment trusts to gain their private assets exposure.
“Excluding investment trusts is bad for competition and reduces choice for pension schemes. Given the fact that investment trusts already manage more than £100 billion in private assets, spanning a broad range of the types of projects the government wants to support, their exclusion makes no sense.”
The AIC has already written to the government and has the support of several members of the House of Lords, including Baroness Bowles, former Chair of the Economic and Monetary Affairs Committee and Baroness Altmann, a former pensions minister.
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “The government has not come up with a defensible reason for compelling pensions to invest in a certain type of asset on the one hand, then limiting their scope for doing so on the other. We know government wants to support more infrastructure and renewable energy production, and investment trusts already provide a proven way for investors to access these assets. It should remove this absurd exclusion and Britain’s pension investors, infrastructure and capital markets will all benefit.”
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Notes to editors
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 275 members and the industry has total assets of approximately £270 billion.
- For more information about the AIC and investment trusts, visit the AIC’s website.
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