Damanda Blanc, CEO of Aviva, warned that giving governmental authority to force pension funds to invest in UK assets will be a serious mistake, describing such a move as a “heavy hammer to break the walnut.”
Speaking on Thursday, Blanc insisted that the specific contribution pensions should be in the interest of individual savers, and that any effort to force the plans to allocate the capital to specific British assets that will risk reducing this principle.
Its comments come amid increasing tensions between the Treasury and the Retirement Pensions Industry on the Palace Agreement, a voluntary agreement signed this week by 17 of the largest pensions in the UK workplace, including Aviva, Legal & General, AEGON and Phoenix.
According to the agreement, service providers committed to allocate at least 10 % of virtual pension funds to the markets for the year 2030, with half -25 billion pounds-to UK-based assets such as infrastructure, startups and other private investments.
Although the Ministry of Treasury estimates that the pledge can generate 50 billion pounds from the new investment, it has been shown that the upcoming review may recommend that the government give powers to delegate assets allocations if service providers fail to achieve their goals.
Blanc firmly fell on the suggestion: “Getting rid of that, we do not think, is the right thing. The government needs to consider unintended consequences. There is a whole series of people – employee staff, employee, workers – workers – who need to change behavior, not pension funds.”
“It is like a heavy hammer to break the walnuts. You should be able to make everyone on the plane to do the right thing.”
The warning sheds light on the discomfort in the pension industry that government intervention can conflict with the duties of credit trustees, forcing them to make investment decisions that are not in the interest of the members of the plan.
Although Chancellor Rachel Reeves said she did not believe that discrimination is necessary, she refused to exclude her significantly, and told reporters earlier this week: “I will never say, but I do not think this is necessary.”
This ambiguity sparked a violent reaction from many of the main signatories to the Dar Al -Qasr Agreement, including Royal London, Aon and Mercer, who argue that retirement pension funds must keep self -government to invest in a way that best serve lenders.
Under the volunteer plan, pension funds showed that their obligations are conditional on credit and relying on governmental and regulatory procedures to remove barriers that prevent the investment of the private market.
The discussion is operated as the government seeks to obtain ways to mobilize local capital in the long run to advance economic growth and support national priorities. But industrial leaders warn that undermining the independence of retirement pension funds can bring in reverse results.
Blanc presented its comments as Aviva reported a strong Q1 trading, as public insurance premiums increased by 9 % on an annual basis to 2.9 billion pounds. The company is currently roaming in a direct line of 3.7 billion pounds, and the Competition and Markets Authority confirmed that it launched a preliminary investigation. Planck said that the investigation was expected and would not delay the deal, which is scheduled to be completed in the middle of the year.
While the Treasury is preparing to publish an investment review in pensions, Blanc’s comments are likely to affect the formation of the discussion – and may increase the pressure on the government to get rid of investment in the UK assets a legal condition.
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