Enabling investment in productive finance: PLSA Response

On 30 November 2021, the Department for Work and Pensions (DWP) opened a consultation on proposed changes to the regulatory charge cap that applies to the default funds of occupational defined contribution (DC) pension schemes used for automatic enrolment. The consultation seeks views on removing performance fees from the charge cap.

The PLSA welcome the Government’s efforts to explore potential barriers to investment into illiquid investments, however, we are not supportive of the exclusion of performance fees from the DC charge cap. We believe this proposal risks diluting an important protection for AE savers, without sufficient evidence at this time to demonstrate it will improve member returns.