Rachel Reeves plans to merge local government retirement schemes into megafunds, aiming to revolutionize the UK's pension system with pooled assets from 86 schemes.
The initiative aims to follow models from Australia and Canada, where larger public sector pension funds boost investment potential while reducing fees by managing in-house.
Reeves's announcement is positioned as a significant pension reform, promising cost savings for councils and an enhanced investment framework for local and national infrastructure.
Despite Reeves's optimism, previous attempts at consolidation have faltered due to lack of urgency and increased costs, leaving only 39% of assets in larger pools.
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