Commenting on the DWP’s Consultation Outcome on ‘Broadening the Investment Opportunities of DC Pension Schemes’ Callum Stewart, Head of DC Investment, Hymans Robertson, says:

“As commented consistently, we are supportive of the Government’s ongoing focus on facilitating investment from DC schemes in a wider universe of opportunities including illiquid assets. We are supportive of the requirement to require trustees to put in place formal policies on illiquid assets in their statements of investment principles and pleased to see this being prioritised with the requirement expected to come into force from the Spring.

“We remain opposed to the additional reporting requirement with Chair’s Statements which are generally not read or understood by members, and so will increase governance burden and costs for trustees. While there appears to now be some flexibility in reporting to attach fund factsheets to the annual Chair’s Statement, this could have gone further to permit links to live factsheets and to clarify that it could be acceptable to replace reporting in the Statement with this.

“We agree with the Pensions Minister’s overriding ambition to create better future for DC schemes and members, but don’t believe the necessary behavioural changes will be driven by these requirements. Instead, we’d like to see more support for decision makers to evaluate investment and wider decisions on a net outcomes basis which means placing costs and charges in the context of materiality. Costs and charges should be the final consideration, not a driver of value.”