Chief of UK universities pension scheme cautions ministers over intervention in funds

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The leader of the UK’s biggest private-sector pension scheme has urged the government to refrain from excessive intervention in how retirement funds are managed.

Speaking last week, before the Treasury outlined plans for a major reform of the sector, Carol Young, chief executive of the £73bn Universities Superannuation Scheme, said she had no problem with new disclosure requirements on schemes to report how much they invested in the UK.

But she told the Financial Times she would have “cause for concern” if ministers were to go a step further and direct trustees as to where funds should be allocated.

“There’s no question that the primary purpose of [pensions] is to deliver in the members’ best financial interests,” Young said. “Trustees need to exercise their fiduciary duties and these are heavy responsibilities that are placed on them. They need the rights that go with that and one of those is the right to select their investment strategy.”

The government declined to comment on Young’s remarks, which were made before the Treasury announced a set of pension reforms at the weekend. These are part of chancellor Jeremy Hunt’s efforts to stimulate the economy by unlocking billions of pounds of retirement savings to invest domestically.

The proposals include a requirement for defined contribution pension schemes to disclose from 2027 how much they invest in the UK. Funds will also have to publish data comparing their performance to rivals and poorly performing schemes will be banned from taking on new business.

Announcing the shake-up, Hunt said: “British pension funds appear to contribute less to the UK economy than international counterparts do as they invest less in our domestic businesses. These requirements will help focus minds on how to improve overall returns and outcomes for savers.”

Young said she would back any…