William Eichler 15 June 2020

Pension ‘superfunds’ could aid post-Covid recovery, think tank says

Pension ‘superfunds’ should be created to invest in infrastructure as part of Britain’s post-Covid recovery, a think tank has argued.

A new report published by the Social Market Foundation (SMF) and sponsored by Tidal Power Limited proposes merging UK pension funds to create fewer, larger funds which would be able to invest large sums in big long-term projects.

The think tank said that ministers preparing for a post-coronavirus recovery should be ready to spend public money to support innovative ‘pathfinder’ infrastructure projects and new renewable energy markets.

Priority should also be given to ‘shovel-ready’ projects that support domestic supply chains and employment, according to SMF.

The Government launched consultations on pension consolidation and the creation of ‘superfunds’ in 2018 and 2019 but ministers have yet to announce decisions.

The SMF said that the need to support an economic recovery with infrastructure projects meant ‘urgent action’ is now needed on pension reform.

Investment rules should also be reformed to allow the new funds to pay the management fees often involved in running big infrastructure projects.

‘The best way to support the infrastructure the country urgently needs in the long-run is to make better use of the billions of pounds held in pension funds that could be profitably invested in helping Britain on its way to a green recovery,’ said Richard Hyde, senior researcher at the SMF.

‘Ministers should move quickly to encourage the creation of pension superfunds like those in Australia and Canada.

‘In the short-term, ministers looking to get infrastructure projects up and running and providing jobs should be prepared to spend directly to support pathfinders that can prove to investors that it is safe to invest in similar projects. That means taxpayers bearing more of the risk, but the long-term rewards justify that risk.’

SIGN UP
For your free daily news bulletin
Highways jobs

Director of Public Health

Royal Borough of Greenwich
Up to £131,210
The Public Health department is at the heart of the council’s business. Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Head of Regeneration and Growth

Plymouth City Council
£68,387 - £74,411 (MFS and relocation available, pay award pending)
This is a unique opportunity to lead our award-winning development team and directly deliver hundreds of millions of pounds of projects. Plymouth, Devon
Recuriter: Plymouth City Council

Director of Adult Social Care

Wiltshire Council
£119,390 - £127,137
Join us as the Director of Adult Social Care and make a real difference to people’s lives. Wiltshire
Recuriter: Wiltshire Council

Assistant Director Planning, Performance & Engagement

East Sussex County Council
up to £97,700
With strong local communities, unspoilt countryside and vibrant coastal towns, East Sussex offers an exceptional quality of life to many. East Sussex
Recuriter: East Sussex County Council

Director of Finance & Commerce

Lancashire County Council
Up to £114,339
You will play a critical role in driving the organisation through complex change and innovation. Lancashire
Recuriter: Lancashire County Council
Linkedin Banner