Financial Times: UK pension schemes face billion-pound bill
13 September 2015
The Mayor of London’s newly appointed pension and investment adviser has warned that UK pension funds are in denial. Imminent European rules could force schemes to put aside “hundreds of billions” of pounds in additional capital.
Edmund “Edi” Truell, who last month was appointed as an adviser to Boris Johnson following two years in charge of the London Pensions Fund Authority, believes Brussels will impose stricter than expected solvency requirements on pension funds within five years.
Mr Truell, who made his name as founder of Duke Street Capital, the private equity firm, in 1998, said the majority of UK pension schemes were “blissfully unaware” of the looming requirements.
He said: “If you listen carefully to European regulators, they intend to impose [insurance-style regulation] on pension funds in the next five years. The industry denies this, but the guys in Brussels are saying that is what they intend to do.
“It is a big threat coming down the line because it would require hundreds of billions of pounds of additional capital to go into UK pension funds to meet the standards, whether they are in the public or private sector.”
Mr Truell added that most pension fund trustees or managers “just hope it won’t happen to them”, instead of planning for the worst.
EIOPA is planning to deliver its final advice on solvency standards for pension funds to the European Commission in March 2016.
© Financial Times
