UK pension funds have been “remarkably remiss” in not engaging more with their own government on infrastructure spending, according to the chairman of the £41bn (€48.5bn) BT Pension Scheme, who urged schemes to collaborate more on projects.
Paul Spencer, also chair of the British Airways and Rolls Royce pension funds, said schemes should try to learn from each other and “shouldn’t be reinventing the wheel”.
He told delegates at the National Association of Pension Funds annual conference in Manchester that infrastructure was a prime example where a more proactive approach was needed.
Discussing the UK government’s medium-term estimate that £320bn would be needed for infrastructure projects, he said infrastructure minister Lord Deighton was “totally convinced” pension assets were required to meet those funding goals.
“But are we collaborating?” he asked. “Are we getting together to work with the government to provide that money in a way that gives us super, long-term, inflation-linked cashflows, which are exactly what we need?”
Spencer said UK funds were simply not doing enough in the infrastructure sphere and “nothing like the size we should be doing”.
He noted that the government had instead been courting Chinese, Canadian, US and Australian institutional and pensions investors as a way of funding projects.
“We’ve just been remarkably remiss in the UK pension fund world of working with our own government in saying ‘why are giving this to these people? You need us.’”
Spencer said he was hopeful funds would soon become more proactive, and that he had furthered the debate, having sorted “internal issues” at the funds he chairs.
He asked: “Can we get ourselves in a better position as pension funds to work with government to jolly well take some of this business at rates that are attractive to us, rather than seeing it go to some of the overseas funds?”