Source · Select Committees · Work and Pensions Committee
Recommendation 4
4
Acknowledged
Paragraph: 54
Prevent DB pension scheme investments from jeopardising the UK economy in future.
Conclusion
Sharp rises in gilt yields which LDI funds lacked the resilience to manage, led to the Bank of England having to intervene in September 2022 to protect financial stability. DB pension scheme investments must not be allowed to jeopardise the UK economy again.
Government Response Summary
The government acknowledges the concern by welcoming the Committee's separate recommendation to bring investment consultants under FCA regulation. It states it will consider this as part of a call for evidence and take various views into account for future steps.
Paragraph Reference:
54
Government Response
Acknowledged
HM Government
Acknowledged
The Government welcomes the Committee’s recommendation that investment consultants are brought within the FCA’s regulatory perimeter. The DWP and HMT call for evidence on Pension trustee skills, capability and culture considers the role of advice and includes that of investment consultants. The aim is to improve DWP and HMT’s understanding of these areas and inform future policy. The Government will take the Committee’s views into account – alongside the perspectives of the Competition and Markets Authority, the FCA, and the FPC – as it assesses its next steps. 3 https://www.gov.uk/government/consultations/defined-benefit-pension-scheme-consolidation/outcome/ government-response-consolidation-of-defined-benefit-pension-schemes 4 Supporting innovation in DB superfunds to drive better saver outcomes (thepensionsregulator.gov.uk) 5 Pension trustee skills, capability and culture: a call for evidence - GOV.UK (www.gov.uk) Defined benefit pensions with Liability Driven Investments: Government Response to Committee’s Seventh Report of Session 2022-23 7