The Department for Work and Pensions (DWP) has launched a call for evidence to help inform the first phase of its pension investment review, which will aim to boost investment, increase pension pots and tackle waste in the pensions system.

The government previously announced plans for a ‘landmark’ pensions review in July, later confirming that the review would focus on defined contribution (DC) workplace schemes and the Local Government Pension Scheme (LGPS).

The call for evidence, which closes on 25 September, aims to inform this work, outlining a number of specific queries in relation to proposals on scale and consolidation, cost vs value, and investing in the UK.

In particular, the call for evidence is asking for industry views on the potential advantages, and risks, from a more consolidated future DC market, as well as what the role of master trusts and GPPs should be in the future pensions landscape.

The call for evidence also queried the potential role of single employer trusts in a more consolidated future DC market, as well as asking for more information about the barriers to commercial or regulation-driven consolidation in the DC market.

In addition to this, it asked whether there is a case for government interventions, aimed at employers or other participants in the market, to encourage pension schemes to increase their investment budgets in order to seek higher investment returns from a wider range of asset classes.

The call for evidence is also seeking views on whether a more consolidated LGPS and workplace DC market, combined with an increased focus on net investment returns, could increase net investment in UK asset classes such as unlisted and listed equity and infrastructure.

The potential for incentives was also raised, as the call for evidence asked whether there is a case for establishing additional incentives or requirements aimed at raising the portfolio allocations of DC and LGPS funds to UK assets or particular UK asset classes.

In addition to the specific queries in the call for evidence, the government invited stakeholders with existing data or unpublished analysis or reports that are relevant to consider sharing these with the review.

People’s Partnership chief executive officer, Patrick Heath-Lay, highlighted the launch of the call for evidence into the government’s pensions review as the "first step in a once in a generation chance to shape the future of the UK’s pension system".

He stated: “It’s important that the review looks at Canada and Australia, which set the gold standard for pension systems, that operate under strong fiduciary governance and produce the kind of outcomes the UK government has said it wants.

“In these markets pension funds are characterised by scale, strong fiduciary governance and expert in-house investment teams that invest in the interest of the saver.

“This combination of focus will produce the diversification the government has indicated it wants, together with better value retirement outcomes for savers.”

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