Member

Amendment 173 aims to prevent the asset allocation powers being exercised ahead of the introduction of the new VFM framework. It is right that the VFM framework is crucial in delivering the change that we and the industry want in private markets investment. However, one challenge that the industry faces in diversifying portfolios is that intense competition for new customers leads to an excessive focus on keeping costs down, even at the expense of potentially investing in assets that could benefit savers more in the long term. The VFM framework will be an important part of overcoming this, but the asset allocation reserve power is also part of that drive. The very existence of the power on the statute book is intended to give pension providers the confidence that the whole industry will be moving as one to diversify portfolios, making the investments necessary and building the capability.