Pension megafund

Treasury - risk management - pensions risk - defined benefit pension schemes - public sector.

In pensions management a pension megafund is a very large consolidated pension fund, created from a number of originally separate defined benefit pension schemes.

The objectives of creating a pension megafund include achieving scale benefits, including enhanced levels of expertise.

UK public sector pension megafunds could unlock £80 billion of investment

"Pension megafunds will be created as part of the biggest set of pension reforms in decades, unlocking billions of pounds of investment in exciting new businesses and infrastructure and local projects...

The radical reforms, which will be introduced through a new Pension Schemes Bill next year, will create megafunds through consolidating defined contribution schemes and pooling assets from the 86 separate Local Government Pension Scheme authorities.

These megafunds mirror set-ups in Australia and Canada, where pension funds take advantage of size to invest in assets that have higher growth potential, which could deliver around £80 billion of investment in exciting new businesses and critical infrastructure while boosting defined contribution savers’ pension pots."

UK government press release - 13 November 2024.

See also

• Bulk purchase annuity (BPA)
• Buyout
• Captive insurance company
• Closed life consolidator
• Consolidator
• Covenant
• Defined benefit pension scheme
• De-risk
• First loss capital
• Insurance
• Pension assets
• Pension buyout
• Pension liabilities
• Pension scheme
• Pensions Regulator (UK)
• Pensions risk
• Public sector
• Risk management
• Superfund
• Treasury

Other resources

• UK public sector pension megafunds could unlock £80 billion of investment as Chancellor takes radical action to drive economic growth
• Pensions Investment Review - HM Treasury - Department for Work & Pensions - Interim Report - November 2024
• Defined Benefit superfunds guidance - the Pensions Regulator - UK