Overview

• The government will merge multi-employer defined contribution schemes and Local Government Pension Scheme assets into funds managing at least £25 billion by 2030, consolidating 86 local authorities into six regional pools.
• Officials estimate the megafunds could save around £1 billion a year in fees and generate £50 billion to £80 billion in new investment for UK businesses and infrastructure.
• Ministers project that the consolidation will boost the average saver’s pension pot by about £6 000 over their career through lower charges and improved returns.
• Legislation will include a reserve power allowing ministers to impose binding asset allocation targets on pension schemes if they fall short of voluntary UK investment commitments.
• Proposed changes to defined-benefit surplus rules have prompted warnings that allowing employers greater access to scheme surpluses could increase risks for members.