Government to blacklist poor performing DC pension schemes

poseidon1

https://uk.finance.yahoo.com/news/jeremy-hunt-piles-pressure-pension-053500379.html

Anybody else read this and was mildly alarmed?

I say 'mildly' since this proposal seems more aspirational than intentional ( can't see they have anywhere enough time to formulate  meaningful legislation before the next general election).

What is particularly concerning is the blacklisting proposal is allied to a generally expressed aim  to strong arm DC schemes into investing far more in British stocks and so prop up an ailing LSE.

Personally, can't see this 'forcible'  re-channelling of pension  funds into British stocks and shares  is in the best of interest of employees trying to build as large a pension pot as possible. Case in point is the Government's own Nest Sharia pension fund. Its the best performing of all the Nest funds by a considerable margin but has minimal UK stocks ( overwhelmingly comprised of USA stocks with emphasis on tech).  What would that fund look like re-configured with a British emphasis, and to what degree would its current performance fall away?

sevenhills

Surely this is just political posturing?

Pension companies must surely want a rising and secure investment, which country they invest their money in is irrelevant.

ColdIron

I like CityA.M. but their job is to sell newspapers. This is just the perennial prelude to every budget

Albermarle

 Case in point is the Government's own Nest Sharia pension fund. 

Although government funding was used to help set up Nest, it is very much an arms length relationship and it's day to day operations, investment choices etc are not under government control. 

Hoenir

poseidon1 said:

What is particularly concerning is the blacklisting proposal is allied to a generally expressed aim  to strong arm DC schemes into investing far more in British stocks and so prop up an ailing LSE.

You do realise that other markets including the USA are similarly impacted. Also that many UK listed companies trade internationally.  Some aren't British at all. List on the LSE due to the prestige of the high standard of UK Corporate Governance.  Global equities are far from being all the same. More than just a name on an app to buy and sell. 

poseidon1

https://www.reuters.com/world/uk/britain-turns-screw-pension-funds-back-uk-assets-2024-03-02/

A little more flesh on the bones of the Chancellor's clarion call to back Britain. Interesting that prominent pension scheme  companies have allegedly committed  to investing in array of unlisted/unquoted UK tech/life sciences companies.

Quite how  investment in these sectors will be rolled out in terms of fund choices for pension scheme members will be intriguing, given unlisted  (illiquid ) companies  must rank has the highest risk in the equities universe. HL's Woodford debacle was not that long ago.

LHW99

To encourage a higher level of eg London listed share in the pension funds would be one thing, but including unlisted / PE in every fund is a step too far IMO. It may provide good returns at times, but it can also give pretty abysmal ones for periods. That's not what the average investor wants from their pension fund, even in accumulation.

Bostonerimus1

This sounds like protectionist, nationalistic posturing. But I can see some advantages of going to a scheme similar to the superannuation schemes in other countries as long as they reduce costs and are run for the benefit of people and not the administrators. If it ends up like NEST then I would be against it because of the fees. This all makes me glad that I have the ability to DIY and do my own pension investing and admin.