UK plans to create pension megafunds with aim of unlocking $100 billion for investment
British Treasury chief Rachel Reeves says the government plans to merge dozens of pension funds with the aim of unlocking tens of billions of pounds for investment and boosting the U.K.’s sub-par economic growth
LONDON (AP) — British Treasury chief Rachel Reeves said Thursday the government planned to merge dozens of pension funds with the aim of unlocking tens of billions of pounds for investment and boosting the U.K.'s subpar economic growth.
Reeves said in her speech to finance leaders in central London that the creation of so-called “megafunds” will represent the “biggest pension reform in decades.”
In her first so-called Mansion House speech, an annual ritual for British chancellors of the exchequer, Reeves said the changes could help unlock 80 billion pounds ($100 billion) for investment. Pension funds invest in a variety of assets, such as shares, bonds, real estate and infrastructure, in an attempt to increase the retirement benefits for their members.
The proposed merger of 86 local authority pension funds in England and Wales has echoes in Australia and Canada, where pension funds are widely seen to have taken advantage of their bigger size to invest in assets and boost growth. By 2030, the new Local Government Pension Scheme in England and Wales is set to manage assets worth around 500 billion pounds by 2030.
