TPR probes barriers to investment in private markets and infrastructure that could deliver better returns for savers
Ref: PN25-39
The Pensions Regulator (TPR) has launched an initiative to explore the approach of defined contribution (DC) and defined benefit (DB) pension schemes to investing in growth assets that could boost returns for savers over the long term, and to better understand the barriers to doing so.
Through the voluntary Mansion House Accord, 17 workplace pension providers have signalled their intent to invest more in private markets by 2030, including in the UK. The announcement in October of the Sterling 20 partnership between 20 of the UK’s largest pension funds and insurers has continued to build on that momentum. TPR published private markets guidance last year to help trustees to improve outcomes for savers by properly considering the full range of options available.
In the current phase of its work, TPR is using its sector insights to understand the range of market opportunities and investment vehicles available to pension schemes, their limitations, barriers and enablers, with an emphasis on UK investment opportunities.
The government’s industrial strategy presents opportunities for pension schemes to invest over the longer term in growth sectors, such as science and technology. By providing insights from across the market, TPR wants to help to create the conditions for schemes to consider investing in a pipeline of assets with long-term benefits for pension savers.
TPR is focusing on DC and DB schemes, with material scale, which may be considering or have the potential to make investments in this area.
TPR plans to complete this engagement by the end of 2025. TPR will share findings with Government and will publish a market oversight report, next year, so that trustees and expert advisers can benefit from the insights that TPR has gained.
Chief Executive Nausicaa Delfas said: “TPR is uniquely placed to engage directly with DC and DB schemes to better understand their approach to investing in private markets and infrastructure, as well as the current challenges and barriers they face. We hope our research will provide insight to help trustees consider investment in diverse assets to achieve better returns for savers."
Through TPR’s ongoing engagement with master trusts and other DC schemes, we see indications that the market is already responding to the Mansion House commitments with trustees considering more diversified investment strategies.
Executive Director of Market Oversight Julian Lyne added: “In the coming months, we plan to ramp up our work to encourage high standards of trusteeship and scheme governance. We expect trustees to acquire the skills, capabilities and access to professional advice to consider investing in diversified portfolios.
“Where schemes fall short, we will be asking trustees to consider whether it would be in savers’ interests to consolidate into larger vehicles with greater investment capabilities.”
Notes for editors
- Market intelligence is being captured through a series of targeted engagements with industry, beginning with key industry investment consultancies, key pension schemes (DC, DB) and a range of industry representative bodies and potentially supply-side providers.
- Our statutory objectives are to:
- protect members’ benefits
- reduce the risk of calls on the Pension Protection Fund
- promote, and improve understanding of, the good administration of work-based pension schemes
- maximise employer compliance with automatic enrolment duties
- minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only)
Press contacts
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- pressoffice@tpr.gov.uk
- 01273 648496
