The Pensions and Lifetime Savings Association (PLSA) said that, with the UK’s upcoming general election and challenging economic background, it is looking to further develop its recommendations aimed at promoting further investment by suitable pension schemes in assets that can help drive domestic growth.
The PLSA said establishing what role pension funds can play in supporting growth in the UK will be its top strategic policy priority for 2024.
The association already issued a number of specific recommendations earlier in October that could bring benefits to both pension scheme members and the UK economy, without the need for “radical, highly disruptive changes” to the operation of the UK retirement savings system.
It said that it wants to develop these recommendations in 2024 to ensure that this government, and whichever party wins the election, are equipped to make informed policy proposals for the £2.5trn pension sector, without compromising the interests of the millions of UK workers saving into an occupational pension fund.
The PLSA’s work programme is reviewed annually by its policy board, a body comprising experts from a broad cross-section of the PLSA’s membership, with responsibility for setting the policy agenda and ensuring the issues that matter most to the industry body’s members are being tackled.
Beyond pension funds’ role in UK growth, the PLSA policy board has identified additional regulatory projects it will prioritise in 2024, categorised under six broad themes, including advocating for an efficient and effective defined contribution (DC) pensions landscape that operates with PLSA member views and in the interests of savers, including improving pension adequacy, an effective value for money framework, supporting proposals to provide savers with more help at retirement and developing solutions to the proliferation of small pots.
It will also advocate for a defined benefit (DB) landscape that allows for a wide range of options to ensure the payments of benefits to members. This, it said, will help open DB pension schemes to thrive and closed DB pension schemes to run on self-sufficiently or to consolidate into DB master trusts, superfunds or to buyout with an insurer.
For its local government pension scheme (LGPS) members, the PLSA said it will help support the orderly transition of fund assets into the eight pools, will produce practical guidance to help the scheme with challenges identified in a 2022 report by the PLSA, and will advocate for progress to continue on the ongoing Good Governance Project.
Another theme for 2024 for the association will be engagement. The PLSA said it will work on initiatives like the Pensions Dashboards, the Advice/Guidance Boundary and the Retirement Living Standards, which are aimed at promoting saver understanding and confidence with pensions.
It will also seek to ensure the regulatory framework for investments operates in a way that supports pension funds in achieving their investment objectives whether related to good risk-adjusted returns, ESG investing or stewardship.
It said it will publish its annual Stewardship and Voting Guidelines in 2024 and engage with a range of associated topics such as the Taskforce for Nature-related Financial Disclosures (TNFD), the ‘S’ in ESG and the Green Taxonomy initiative.
The PLSA will also focus on governance and administration to ensure trustees of pension schemes, and their supporting teams, have the skills, knowledge and understanding to ensure the right pension is paid to the right people at the right time.
The association said it plans to draw its extensive existing policy views into a single document to make it clearer how it would like the pension landscape to look a decade from now.
John Chilman, chair of the PLSA policy board, said: “The PLSA represents a diverse range of pension scheme members from across the DB, DC, LGPS and master trust segments. As our busy work programme shows, there are a lot of regulatory and policy initiatives underway to ensure that the system is working as well as it can for savers.”
He added that the PLSA policy board will continue to champion a policy framework that means people will have an adequate income in retirement and aim to ensure the regulatory and operating environment is appropriate for our members.
Nigel Peaple, director of policy and advocacy at PLSA, said the next year will be another “very busy one for the PLSA”.
“Our work programme for next year carries over many of the initiatives we have been working on over several years, with some new projects and some re-prioritisation. As ever, we will continue to play an important part in raising standards, sharing best practices and ensuring pension schemes serve their members well,” he noted.
Peaple added that this year the debate about how pension schemes can contribute to the UK economy will continue to dominate, while consolidation continues to be a big consideration for schemes of all types.
“We will continue to advocate for policy reform which addresses the pension adequacy problem,” he said.
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