Marvin OnumonuPensions UK is urging the Government to remove powers from the Pension Schemes Bill that would let ministers decide how pension schemes invest workers’ retirement savings.
Pensions UK said it backs most of the bill, which aims to cut complexity and improve saver outcomes.
However it warned that if the mandation power is used, it would damage market competition and put saver outcomes at risk.
If the power stays in the bill, Pensions UK said there should be strict limits.
These include a cap on mandated investment, matched to the 10% and 5% voluntary Mansion House Accord targets, stronger reporting before any power is used, and a shorter sunset clause ending in 2032 instead of 2035.
Additionally, Pensions UK said the Government should keep supporting a pipeline of UK investment opportunities and a regulatory environment in line with the Mansion House Accord.
Julian Mund, CEO of Pensions UK, said: “Now is the time to drop the reserve mandation power from the Bill.
“Pensions UK strongly supports most of the provisions in the Bill, and wishes to see it passed.
“But the mandation power risks distorting the market, compromising saver outcomes and eroding trust in the system.”
Mund added: “The current drafting of the provision goes far beyond the scope of the Mansion House Accord and could be used to direct investment in very broad terms, either by this Government or a future one.
“Should the power remain in the Bill it is critical that it is aligned to the standards set by the Accord, and that it goes no further.”
