Response to DWP Consultation on Investment Innovation and Future Consolidation

The proposals outlined in the consultation are a 'good step forward', but need clear guidance and clear sanctions for them to have a positive impact.

Darren Philp, Smart Pension’s Director of Policy and Communications, said:

On illiquids

“There is no doubt at all that encouraging investment in illiquid assets and improving value are important themes in driving better outcomes for savers in the workplace. While we broadly welcome the Government’s ambition and proposals, what is currently on the table will only have limited effect if these types of instruments do not fit into the individual scheme’s strategy, and that includes cost.

“If and when requirements are put on schemes, we would encourage the Government to provide clear guidance as to what is expected to help scheme governance meet policymaker’s expectations.”

On the proposals for scheme consolidation

“It’s implicit that scale, efficiency, and good governance are important in DC pensions to drive better member outcomes.

“The proposals outlined in the consultation are a good step forward, but need clear guidance and clear sanctions for them to have a positive impact. All workplace pension savers deserve to be in schemes that are well-run and offer great value for money.

“We encourage DWP to grasp the nettle and be even more proactive in forcing consolidation where it is in the members’ interests. While this initially will be a lot more effort for the Regulator, longer-term it will reap significant benefits in securing better member outcomes and making it more efficient for the Regulator to regulate effectively. Similar standards should be applied to single employer trusts as well.”

About Smart

Smart is a global savings and investments technology platform provider. Co-founded in 2014 by Andrew Evans, Group CEO, and Will Wynne, Group MD, it is one of the UK's largest providers of workplace pensions. Its award-winning master trust, Smart Pension, is overseen by independent professional trustees.

In 2020 Smart Pension was named Master Trust Offering of the Year at the Pension Age Awards. Other awards include DC Master Trust of the Year, DC Innovation of the Year and Retirement Innovation of the Year in the 2019 UK Pensions Awards. Smart Pension was also named European Pension Fund of the Year 2019 in the European Pension Awards.

Legal & General Investment Management (LGIM), J.P. Morgan, Link Group, Natixis Investment Managers and Barclays are all investors in Smart.

We tweet as @SmartPensionUK.

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