Rachel Reeves Plans ‘Canada-Style’ Pension Funds, Times Reports
(Bloomberg) -- The UK government is considering the consolidation of multiple local government pension plans to pool their £360 billion ($458 billion) of assets and create a ‘Canada-style’ model, according to the Times newspaper.
Most Read from Bloomberg
Africa’s Richest City Needs $12 Billion to Fix Infrastructure
New York City’s Outdoor Dining Sheds Will Start Disappearing
New York City Paid $2 Million for Empty Hotel Rooms Meant for Migrants
The 5 Coastal States That Face the Most Devastating Flood Risk
Chancellor Rachel Reeves, who is meeting with the head of Canada’s largest pension funds in Toronto on Wednesday, believes a single fund will drive investment into infrastructure projects and generate higher returns. The consolidation is also designed to cut costs and fees, the paper reported.
Reeves has already announced a review of the sector and plans to make pension fund reform part of her first Mansion House speech in the City of London later this year, the paper said. She will not introduce mandatory rules to force pension funds to invest a certain proportion into riskier UK stocks or assets.
Canada’s pension funds, which include the Ontario Teachers’ Pension Plan and the Canada Pension Plan, are noted for their significant infrastructure investments, something the government wants UK funds to do more of.
“The size of Canadian pension schemes means they can invest far more in productive assets like vital infrastructure than ours do,” the newspaper reported Reeves as saying. “I want British schemes to learn lessons from the Canadian model and fire up the UK economy, which would deliver better returns for savers and unlock billions of pounds of investment.”
The Treasury didn’t immediately respond to a request for comment.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
