Sir Tony Blair’s think tank says thousands of UK pension schemes should be combined into just half a dozen £400bn superfunds to boost investment in businesses and infrastructure.
In a paper today, the Tony Blair Institute in Whitehall supports circulating proposals to make the Pension Protection Fund (PPF) – a lifeboat scheme for the pension funds of companies that fail – the first of a new generation of “global” schemes that are better equipped to invest in the UK for the long term.
Under this plan, around 4,500 of the lowest final salary or ‘defined benefit’ schemes would be offered the opportunity to merge with the PPF while retaining the terms offered to members, creating a new giant called GB Savings One.
If the plan is successful, the institute suggests this model could be rolled out to the rest of the industry, with a slew of new not-for-profit organizations taking over the remaining final salary schemes, 27,000 defined-contribution schemes, local government pension funds and public sector pension schemes to “roughly one create half a dozen” mega systems ranging in size from 300 to 400 billion pounds.
Comments are closed.