U.K. Chancellor Rachel Reeves met with some of Canada’s biggest public sector pension plans this month, as the country looks to reform its public pension system, according to a report by the Financial Times.
Reeves is pursuing the creation of a pension model that would allow the U.K.’s local government pension scheme — worth about £360 billion and serving more than six million plan members — to invest more directly in assets like equities and infrastructure through a pooled fund model. Currently, the scheme is divided across 86 individually-managed pension funds.
Read: 2022 GIC coverage: Canada’s Maple 8 pension funds outperforming peers on a global scale
Reeves met with leaders from the Canada Pension Plan Investment Board, the Ontario Municipal Employees’ Retirement System and the Ontario Teachers’ Pension Plan earlier in the month, according to the report.
U.K. pensions minister Emma Reynolds has been tasked with overseeing a review to ensure a consolidation process that unlocks the investment potential of the currently fragmented model, said the report, noting if the change were to take place, the funds could more effectively invest in the type of assets that have propped up the reputation and size of the Canadian Maple 8 model.
“I want British schemes to learn lessons from the Canadian model and fire up the U.K. economy, which would deliver better returns for savers and unlock billions of pounds of investment,” Reeves said in the report.
According to a separate report from The Guardian, critics of the current U.K. pension model say a pooling capital system would save about £1billion in service fees across the fragmented retirement funds.