Member

In a similar vein to Amendments 55 and 60, Amendment 94, from the noble Baroness, Lady Noakes, seeks to enable a scheme to qualify for the new entrant pathway if it can deliver strong investment performance as an alternative to the ability to grow to scale over time. The Government’s view is that a strategy to grow to scale will be fundamental for a new entrant in the market. We fully realise that this will be over a period of time, but we do not agree that investment performance can work as an alternative. It is difficult to envisage how a new entrant would demonstrate this when they apply for approval; they will have no assets or performance record to demonstrate that they will be able to deliver above the average achieved by a scheme at scale. That would give the regulators a difficult task in seeking to make an assessment based on long-term assumptions. I am also concerned about the stability of this approach. What happens if and when the scheme does not exceed its investment performance? That would not offer the stability that members or employers need, and they would want to join a new scheme.