UK eyes ‘Canada-Style’ pension model

The UK government is exploring the idea of merging multiple local government pension plans into a single consolidated fund with assets worth £360 billion ($458 billion), according to The Times.

Chancellor Rachel Reeves is in Toronto to meet with leaders of Canada’s largest pension funds to discuss a Canada-style model that would drive investment in infrastructure and generate higher returns. The consolidation aims to reduce costs and fees without mandating investments in riskier UK stocks or assets.

The Canadian pension funds, such as the Ontario Teachers’ Pension Plan and the Canada Pension Plan, are recognised for their substantial infrastructure investments, a strategy the UK government hopes to emulate. Reeves plans to address pension fund reform in her upcoming Mansion House speech in London.

“The size of Canadian pension schemes means they can invest far more in productive assets like vital infrastructure than ours do,” Reeves said, adding that the UK could benefit from following Canada’s lead to boost the economy and deliver better returns for savers.

Attribution: Bloomberg