Lady Amanda Blanc, executive director of Aviva, warned that giving her the power of the government to force pension funds to invest in assets of the United Kingdom would be a serious false step, describing a movement like “a hammer in ways to decipher crazy.”
Speaking on Thursday, Blanc insisted that defined contribution pensions must be invested in the best interest of individual savers, and that any effort to force the schemes to assign capital to specific assets of the United Kingdom would risk undermining that principle.
The comments occur in the midst of increasing tensions between the Treasury and the pension industry on the agreement of the House of the Mansion, a voluntary agreement signed this week by 17 or the largest pension pension suppliers in the United Kingdom, including Aviva, Legal & General, Aegon and Phoenix.
According to the agreement, the suppliers promised to allocate at least 10% of their default pension funds to private markets by 2030, with half of those £ 25 billion in assets based in the United Kingdom, such as infrastructure, new companies and other private investments.
While the treasure estimates that the promise could generate £ 50 billion in a new investment, it has arisen that an upcoming review can reach the government to obtain powers to demand assets of assets if suppliers do not meet their objectives.
Blanc firmly retreated the proposal: “The mandate, we do not believe, is the right thing. The Government must consider the unwanted consequences. There is a whole chain of people: employee benefits consultants, employees, workers, who need to change the behavior, not just pension funds.”
“It’s like a sled hammer to break a utility. You have to be able to make everyone on board doing the right thing.”
The warning highlights the growing restlessness in the pension industry that government intervention can conflict with the fiduciary duties of the trust, potentially forcing them to make investment decisions that are not the best for the members of the scheme.
Although Foreign Minister Rachel Reeves has said that she does not believe that the mandate is necessary, she has not refused to rule it out, tell the reporters earlier this week: “I will never say ever, but I do not think it is necessary.”
This ambiguity has caused a violent reaction of several key signatories to the agreement of the mansion house, including Royal London, Aon and Mercer, who argue that pension funds must retain autonomy to invest in a way that best serves the savers.
According to the voluntary scheme, pension funds made it clear that their commitments are a conditional project for fiduciary duty and depend on government and regulatory action to eliminate barriers for private market investment.
The debate is developing while the government seeks ways to mobilize national long -term capital to boost economic growth and support national priorities. But industry leaders warn that they undermine the independence of pension funds could be counterproductive.
Blanc made his comments when Aviva reported a solid negotiation of the first quarter, with general insurance premiums that increased 9% year -on -year to £ 2.9 billion. Currently, the company is sailing for an acquisition of £ 3.7 billion direct line, and the competition and market authority confirmed that it has launched a preliminary investigation. Blanc said the investigation was expected and that the agreement would not delay, which will be completed in the middle of the year.
As the Treasury prepares to publish its investment review of Invests, Blanc’s comments are likely to influence the debate configuration, and can increase the pressure on the government to clean up the investment in the United Kingdom assets a legal requirement.
