New UK chancellor Rachel Reeves has set out how she wants to create a 'Canadian-style' pensions system in the UK, with large retirement funds investing in large infrastructure projects.
On the way to meet with pension scheme bosses in Toronto and former Bank of England governor Mark Carney, Reeves told the Financial Times she aims to consolidate the £360 billion local government pension scheme, which is currently divided into 86 funds.
Emphasising the importance of large-scale investments in productive assets, such as infrastructure, she said a review had been launched by pensions minister Emma Reynolds to explore the consolidation process and how these schemes could enhance investment in UK growth.
Reeves has ruled out mandating specific investments for UK funds and has previously suggested smaller schemes of under £200 million might be failing to provide value for money and failing in their fiduciary duty to shareholders.
Simply replicating the Canadian model, with its extensive infrastructure investments, might not solve all issues, she acknowledged.
In her upcoming Mansion House speech, Reeves plans to discuss how the government, industry and regulators can work together to boost UK economic growth.