Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. ASSET OWNERS
October 26, 2016 01:00 AM

State of U.K. market gets hard look at conference

Sophie Baker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg

    Reinvention was the overarching theme of the Pensions and Lifetime Savings Association's annual conference, as delegates and experts came together to discuss the major issues affecting the retirement industry.

    Delegates gathered in Liverpool, England, to hear about the association's work in reinventing defined benefit funds through its own task force, which unveiled its interim report. The reinvention of Europe following the U.K.'s vote to leave the European Union was a topic mentioned in almost every session across the three-day conference. And the reinvention of multiple-employer defined contribution plans — known as master trusts — was a key issue discussed throughout the conference.

    The issue of DB fund deficits in the U.K. has worked its way back into the headlines over the past few months, with companies revealing their struggles with funding shortfalls. The PLSA's DB task force, launched in March to consider solutions to the problems that defined benefit funds and their sponsoring employers face, presented its interim report Oct. 20.

    Launching the report and talking through its findings, Ashok Gupta, chairman of the task force, said: “Lest we forget, DB is still an enormous force for huge social and economic good. And it matters enormously today and it will continue to matter for decades to come.” He said DB is a “key provider to capital markets, and through capital markets to the U.K. economy. The sector invests £1.5 trillion ($1.8 trillion), a figure that has doubled over the last decade. It owns 80% of the U.K. index-linked gilt market. It is a big owner of U.K. infrastructure, a growing owner of U.K. infrastructure, and wants to own more. And a well-functioning DB sector is a crucial driver for all parts of the U.K. economy.”

    Mr. Gupta said the task force concluded the DB system is “not working as it should — the sector has problems.” But the industry needs to reinvent the way it thinks about these issues. “(These are) not problems you can understand just by looking at deficit numbers — big and scary and wildly fluctuating as they may be. We believe you have to start from what really matters — the risk to members' benefits,” he said.

    Brexit impact

    The DB picture was affected negatively by Brexit, and the outcome of the vote and reinvention of the U.K.'s relationship with the European Union was addressed by Pascal Lamy, former director-general of the World Trade Organization.

    “What could have been soft Brexit, sort of Swiss-like, Norwegian-like arrangement,” has given way to a hard Brexit scenario, Mr. Lamy said. He cited a “good friend” of his who “once said the difference between belonging to the union and soft Brexit is, if you belong to the union you have got one foot in and one foot out … soft Brexit would be one foot out and one foot in — and that is a big difference.”

    Mr. Lamy said the potential loss of passporting — the ability to market investment strategies across European borders — through a hard Brexit will harm the City of London, and this is why “Frankfurt, Milan, Dublin and even Paris” have started to compete for business. He cited a campaign to pull business into Paris, encouraging the financial sector to “Try the Frogs, which I think is a reasonably British way for the French to put their case in order to promote Paris.”

    Mr. Lamy concluded that this is a reinvention of the relationship between economics and politics. “After decades of economics and politics interacting with each other in a way that economic rationality at the end of the day would trump political irrationality … this has changed. We are in a period where politics, geopolitics, trump economics and geo-economics.” While these are interesting times, Mr. Lamy said that for the PLSA audience, it “creates a lot of uncertainties – so good luck, because you will need a lot of brain juice to adjust to that.”

    A lot of brain capacity was also needed for discussions around the reinvention of the DC landscape. Changes to the master trust market were flagged by Richard Harrington, undersecretary of state for pensions, in his Oct. 19 presentation. He said a bill had been presented to Parliament that day, addressing issues around master trusts, and that there cannot be a "situation where parts of pensions are more regulated than others."

    The government published its Pension Schemes Bill on Oct. 20, with changes including a move for stronger regulation of master trusts, capital adequacy rules and increased powers for the U.K.'s Pensions Regulator. The bill was largely welcomed by delegates at the conference, although some warned that the changes — which were largely viewed as something that will “flush out” master trust providers that are not up to scratch — will require work by the industry to ensure participants are not adversely affected, and that the regulator's resources are beefed up.

    The PLSA, which went through a reinvention last year when it rebranded from the National Association of Pension Funds to ensure it kept up with the changing retirement landscape, is undergoing its own assessment. The association is reviewing its internal governance, ensuring it is well placed to continue to act on behalf of its members.

    Joanne Segars, CEO of the PLSA, also revealed that she had convened a Brexit task force, ensuring that the association knows what a successful Brexit looks like from a retirement perspective. Announcing the task force in a speech Oct. 20, Ms. Segars also called for change to the relationship between retirement plans and the companies in which they invest. “It's essential that pension funds know more about how the companies in which they invest manage and engage their workforces ... we know that engaged workers make for stronger companies, and make for better investment returns.”

    The association is therefore calling on companies and corporations to provide more information to retirement plans and other investors about their workforce, such as diversity and pay ratios.

    Related Articles
    U.K. conference emphasizes growth of women in industry
    Pensions and Lifetime Savings Association to undertake governance review
    PLSA report shows growing default risk for corporate U.K. pension funds
    British Airways agrees to contribute £300 million a year through 2027 to …
    Pound, FTSE 250 rise after court rules U.K. needs parliamentary approval to exi…
    U.K. to cap early exit fees for withdrawing from DC plans
    Former BlackRock portfolio manager sentenced to 12 months for insider dealing
    PLSA calls for strong financial services sector post-Brexit to stabilize retire…
    Chances for manager gains expand as funds sprout up across Continent
    Pensions and Lifetime Savings Association CEO to depart
    Recommended for You
    FTX_Screen_i.jpg
    FTX bankruptcy ensnares Kraft, Och and other family offices
    ONLINE_180419851_AR_0_SWJHUISTXOVN.jpg
    Northern Trust plan universe returns -4.2% in Q3
    The Institutional Investor's Guide to ESG Investing
    Sponsored Content: The Institutional Investor's Guide to ESG Investing

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    The Future of Infrastructure: Building a Better Tomorrow
    Outlook 2023: Opportunity in a volatile world
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing