Call for evidence for the first stages of the Pensions Investment Review

The government published a call for evidence on Wednesday as part of the first phase of its Pensions Investment Review. The timescale for responses to the call is very short – the closing date is 25 September – which is consistent with the new government’s drive to make their proposed changes happen quickly. 

The call for evidence is fairly brief and targeted, with questions for stakeholders divided into three categories: Scale and Consolidation, Costs vs Value and Investing in the UK. The questions highlight key features and future next steps that could be taken by the new government, including queries regarding risks and advantages of consolidating the defined contribution (DC) scheme market, the role of master trusts in the wider pension landscape, the role of various stakeholders in setting costs in the DC marketplace, and factors and potential incentives for shifting UK asset classes for pension fund investment. Additionally, with specific reference to the consultation carried out by the previous government in 2023, the call for evidence seeks feedback on the potential to develop asset pooling policy in Local Government Pension Schemes (LGPSs).  

This call for evidence, and the Pensions Investment Review more generally, focuses specifically on DC workplace schemes and LGPSs. At this time, the government and relevant regulators are not concerned with defined benefit (DB) schemes – we gather that policy development for DB schemes may proceed in parallel with the review and only tangentially be affected by it. It is unclear whether a wider review of the DB pension landscape (as opposed to consultation in due course on any specific legislative proposals) will in fact be undertaken. There has also so far been no indication of whether the changes affecting DB schemes that were consulted on by the previous government, such as the potential changes to the rules on refunds of surplus, will be introduced; and if these changes are introduced, when. 

 If you would like to discuss in further detail any of the points raised in this blog post, please get in touch with your usual Freshfields contact.