"The pension manager must invest in the best interest of the client, and UK ministers have often wished UK funds would show more home bias by channelling more pensioners' cash towards domestic assets."
"The Mansion House accord was a pledge by 17 of the biggest providers to earmark a slice of workplace pensions for UK private assets, but it was made clear the arrangement was voluntary."
"The commitment was subject to fiduciary duty and consumer duty, dependent on government and regulators implementing critical enablers, which weakened the force of the accord."
"Concerns arose when Reeves raised the prospect of having powers to mandate the funds to follow through on their commitments, leading to fears of forced investments into unproductive projects."
Pension investment is guided by the principle of fiduciary duty, requiring managers to act in clients' best interests. UK ministers have encouraged funds to invest more in domestic assets for economic growth. The Mansion House accord, initiated by Rachel Reeves, aimed for 17 providers to allocate 10% of workplace pensions to UK private assets, emphasizing voluntary participation. However, concerns arose over potential government mandates, as many providers opposed enforced commitments, fearing misallocation of funds to unproductive projects.
Read at www.theguardian.com
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