In a keynote speech at a recent pensions conference, Emma Reynolds set out two key objectives: to improve the level of pension fund investment in the UK economy and to improve savers’ returns.

Notable points in the speech to the Pensions and Lifetime Savings Association’s annual conference included:

• Building on the Mansion House Compact and confirming an interim report on the first phase of the government’s Pensions Review would be published before Christmas, with a final report next year.
• Commenting that the judgment in the Virgin Media case was “serious and complex” but without confirming what the government’s action (if any) would be.
• Outlining that reform under the upcoming Pension Schemes Bill would progress small pot consolidation, introduce a Value for Money framework and compel DC schemes to offer retirement products to members.
• DB consolidation (“superfunds”) was still a matter under consideration and consultation responses were being reviewed.
• CDC is to receive strong support from the government.
• The government is committed to the current dashboard timetable.
• The extension of the auto-enrolment regime is to be considered under the second part of the Pensions Review, although the “gaps” in provision due to the age 22 limit and the minimum income threshold were acknowledged.

Ms Reynolds is the first joint pensions minister to work across the Treasury and the DWP, and she hopes her dual role will help break down barriers that may have prevented effective reform in the past.

The government’s priority remains to “unlock the true potential of the £2tn pensions industry” by investing in UK productive assets and “homegrown businesses of all sizes”.

However, when asked to confirm whether she could rule out mandatory investment of scheme funds in UK assets she would only say that “all options were being considered”.

Speaking at the Institute of International Finance earlier this month, Bank of England Governor Andrew Bailey has echoed the views of some of the country’s largest pension funds by warning the government not to make compulsory an allocation of pension money to UK assets.

The Society of Pension Professionals has published a paper relating to productive finance, entitled Solving the UK investment puzzle, which provides a detailed analysis of the challenges of ensuring that UK pension schemes invest more in their domestic market, and explores a range of options as to how these challenges might best be overcome. The paper acknowledges the need for increased pension scheme investment in productive finance assets, as well as concerns that this could have potentially negative consequences for savers if not carefully implemented.

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