Wealth Design News

13/03/19
The UK government has unveiled proposals aimed at increasing workplace defined contribution (DC) schemes’ investment in so-called illiquid assets, such as infrastructure. Less liquid assets such as small and medium-sized companies or housing were attractive from a diversification and returns perspective for schemes, and were also important sectors of the economy, according to the government. To get more DC schemes investing in these assets the Department for Work and Pensions (DWP) announced plans for a new way of accommodating performance fees – often associated with illiquid assets – within the 0.75% charge cap on default funds used by auto-enrolment pension schemes. It also proposed a measure aimed at encouraging consolidation, which would require some or all smaller DC schemes to evaluate every three years whether the scheme ought to be merged with a larger scheme and wound up.