Recommendation 11

HM Government Accepted

The Government remains committed to working with industry when assessing options for generating investment in the UK economy. We understand that initiatives undertaken by the Government to stimulate economic growth to date have been well-received; however, we are actively considering what more can be done to ensure the regulatory environment continues to position the UK as a leading destination for investment. We are 11 https://www.gov.uk/government/calls-for-evidence/pension-trustee-skills-capability- and-culture-a-call-for-evidence considering how further to bolster areas suffering from underinvestment, such as major infrastructure projects and capital investment for growing UK firms. There are £1.2 trillion in assets under management12 in DB schemes. The Government believes that these assets can work harder to benefit members, employers, and the broader economy. To enable this, we will legislate to establish a legislative authorisation regime for Superfund consolidators. This is a key reform that will increase employers’ options for dealing with their DB legacy liabilities, while enabling members to benefit from better governance and greater security through consolidation. By providing an option for employers to break the link with their scheme, Superfunds will support the consolidation of DB schemes– helping to increase opportunities for investment in UK businesses and improving member security. We are also looking at ways DB schemes choosing to run on can be incentivised to deliver for savers and the wider economy. On 28 January 2025, following the consultation on ‘Options for Defined Benefit schemes’,13 the Government committed to give pension trustees and sponsoring employers the flexibility to use DB surplus to increase the productivity of their businesses–to boost wages and drive growth or unlock more money for pension scheme members. The consultation reflected the current landscape in which DB funding levels are generally high and many schemes are in surplus. The Government’s response to this consultation will be published this spring. The Government has been clear that it wants to encourage investment in fast-growing businesses and infrastructure, and these are key examples of the sorts of investment that greater scale in pensions can unlock. To this end, the Government published the Interim Report of the Pensions Investment Review at the Mansion House event on 14 November 2024. The Pension Investment Review’s final report is due to be published in Spring 2025, ahead of legislation being introduced in the Pension Schemes Bill. 12 https://www.ppf.co.uk/-/media/PPF-Website/Public/Purple-Book-Data-2024/PPF-The- Purple-Book-2024.pdf 13 https://www.gov.uk/government/consultations/options-for-defined-benefit-schemes/ options-for-defined-benefit-schemes