Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps his Department is taking to support (a) defined benefit and (b) defined contribution pension schemes to invest in illiquid assets.

DB schemes already can - and do - invest in illiquid assets. Illiquid investments make up around 10% of DB scheme assets.

For DC schemes, regulatory changes planned for this spring will allow performance-based fees to be removed from the scope of the DC pension charge cap. This will make it easier for trustees to access a broader range of illiquid assets that could benefit savers. We confirmed our intention to introduce this reform in our response to the ‘broadening the investment opportunities of defined contribution schemes’ consultation published on 30 January, along with supporting statutory guidance to help trustees with their decision making regarding performance fees.

Trustees in DB and DC have a fiduciary duty to make investments that are in the best interest of scheme members and need to ensure pension schemes have sufficient liquidity to pay pensions and other benefits under the scheme as they fall due.