The chancellor has responded to an open letter by the Pensions and Lifetime Savings Association and 14 pension funds and industry leaders. The letter aimed to demonstrate openness to collaboration on the Mansion House reforms, while highlighting areas that need attention.

The letter discusses UK investment, consolidation in the Local Government Pension Scheme in England and Wales, defined contribution and defined benefit schemes, as well as saying that recent initiatives around climate change – a consultation on a green taxonomy, ESG ratings provider regulation and transition plans for financial services – “present an opportunity to align growth reforms with the government’s climate ambitions”. 

Rachel Reeves responded to the letter saying: “I want to work with industry and stakeholders to deliver pension reforms that increase investment in infrastructure, boost people’s pension pots and grow the economy.” 

The letter by pensions industry representatives noted that pension funds are already significant domestic investors, and emphasise that consolidation must prioritise members’ interests, achieving value for money through economies of scale and enhanced negotiating power.  

It said the industry supports the completion of the transfer of remaining LGPS assets into pools and the definition of the pool model, adding: “ A lot of good work is already in place across the LGPS, and administering authorities and pools should take care further work is done in a pragmatic way which maintains value and does not incur unnecessary investment losses or costs.”

For DC, the PLSA is urging the government to set out a roadmap for auto-enrolment contribution rates.

The association also wants to know where the government is planning to take private sector DB, writing: “We would also welcome further clarification on government ambitions for the future of DB schemes, especially around treatment of open schemes, surplus sharing and consolidation measures in this area.”

PLSA chief executive Julian Mund said by working closely with the government on the Mansion House reforms, the pensions industry can “ensure the system delivers greater value for savers, supports long-term economic growth, and advances our climate ambitions”.

“Consolidation, stronger governance, and economies of scale will drive better outcomes for members, but it must be done pragmatically. By aligning with government proposals and safeguarding fiduciary duties, we can secure the best possible future for savers while boosting investment in UK assets and ensuring the system remains globally competitive,” he said.

The letter is signed by Mund and Emma Douglas for the Pensions and Lifetime Savings Association, Border to Coast Pensions Partnership, Brunel Pension Partnership, Cushon, Legal & General Investment Management, LGPS Central, Nest, People’s Partnership, Railpen, Smart Pension, Surrey Pension Fund, Willis Towers Watson UK, Universities Superannuation Scheme, West Midlands Pension Fund and West Yorkshire Pension Fund.

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