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Reeves told the BBC ahead of her first speech as chancellor at the annual Mansion House gathering of investors in London that she wants the UK’s pension schemes to be more like Canada and Australia.<\/p>\n
In those countries, pensions of local government workers, such as teachers and civil servants, are pooled into a handful of funds which are able to make big investments around the world.<\/p>\n
“They probably have the best pension funds anywhere in the world,” Reeves said.<\/p>\n
The pension reforms are part of Reeves’ plan to boost growth and come after many businesses have criticised the rise in employer National Insurance contributions in the Budget.<\/p>\n
She told the BBC that she is “not immune to those criticisms, but it was necessary to increase taxes\u201d to get the state finances in shape and \u201cproperly fund\u201d public services.<\/p>\n
The government plans to merge the 86 council pension funds – which include \u00a3354bn in investments and are run by local government officials – into “megafunds” run by fund managers.<\/p>\n
Reeves has decided against forcing pension funds to invest in British firms, but will require each fund to specify a target for UK investments.<\/p>\n
Separately, the government also wants to set a minimum size limit on defined contribution schemes in the private sector, which manage around \u00a3800bn of investments, to encourage the consolidation of the around 60 different multi-employer schemes.<\/p>\n
The government says its changes could “unlock” \u00a380bn worth of investment into the UK.<\/p>\n
“Our pension funds in Britain are too small to be making the investments that get a good return for people saving for retirement and to help our economy to grow,” Reeves said.<\/p>\n
She added it made \u201cno sense at all\u201d that Canadian teachers and Australian professors were more likely to be invested in many long-term UK assets than savers in Britain.<\/p>\n<\/div>\n<\/div>\n
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