The Pension Schemes Act has passed into law with huge implications for workplace pension schemes and likely retail pensions too.
There was a huge dispute between the House of Commons and the House of Lords about mandation powers, with the government reserving the power to mandate schemes to invest ten per cent of assets in private assets, half in the UK. The dispute actually threatened the act being passed at all.
With a huge number of compromises the legislation did pass. Corporate Adviser sums up the debate.
To quote CA, one peer described the new wording as “mandation-lite” and said while there will still concerns around these reserve powers, safeguards had been put in place which should help protect member interests.
These safeguards, which we struggled to find detailed in the trade papers, include a requirement for the government to produce a report into why mandation is required, a stipulation that it can be used only once, and a sunset clause of 2032. It must be used by then or not at all. Schemes can even appeal mandation in the interest of members.
This is a good summary from WTW looking at many of the other measures.
These include a value for money framework (VFM) for DC schemes and requirements for multi-employer schemes operating in the auto-enrolment market to demonstrate scale. Defined contribution schemes will need to have at least £25 billion in their main default fund by 2030 or have £10 billion by that date and a credible plan to reach £25 billion by 2035.
From 2030, there will be a requirement for members' dormant small pots of £1,000 or less to be automatically consolidated, unless a member opts out.
It also places duties on trustees to consider and put forward default pension benefit solutions for their members.
Separately but also in pensions, the Tony Blair Institute, the former Prime Minister’s thinktank suggests a radical overhaul of the state pension breaking the triple lock and essentially giving workers 20 years of state underpinning to call on. Pensions Age reports.
US stocks have closed at an historic high in April, perhaps to the surprise of some. FTAdviser reports.
L&G has received FCA approval to offer targeted support. Again FTAdviser reports.
Investment Week reports that activist hedge fund Saba Capital has emerged victorious in its campaign to replace the board of Edinburgh Worldwide Investment (EWI) trust after shareholders voted to replace the incumbent directors with three independent Saba-nominated replacements.
A big shift for the investment company sector.
Shackleton Advisers has acquired Surrey-based financial advice firm Arundel Wealth Management, beefing up its specialist sports advice offering. The firm or its backers, just can’t stop buying, as Professional Adviser reports.
Citywire New Model Adviser looks at how the investment directors of national advice firms are managing portfolios during the crisis.
Speaking at the Association of Foreign Banks in London on Thursday, FCA chief executive Nikhil Rathi said the FCA must move beyond a model focused solely on stability and instead embrace what he described as “adaptive stability” to keep pace with rapid technological and market change. Money Marketing reports.
