Pensions updates | March 2025

Introduction of the reserved investor fund (RIF)

The RIF will be a new type of UK-based investment fund vehicle legally structured as an unauthorised co-ownership alternative investment fund. The aim is to facilitate investment in illiquid assets by institutional investors (such as pension funds) through offering a more flexible and cost-effective alternative to existing authorised contractual schemes. Legislation has now passed and it came into force on 19 March 2025.

LGPS investment review updates

There have been some developments related to the Local Government Pension Scheme (LGPS) investment review that was announced last year in order to tackle inefficiencies and drive more investment into the UK. In a speech to the Pension and Lifetime Savings Association Conference 2025, the minister for pensions stated that he is to meet each of the various LGPS investment pools in the coming weeks and that by 2026 the LGPS will be made up of "pools of professionally managed capital" which will be "accountable to authorities via robust governance structures and delivering for members and their communities".

This is following a review of the LGPS, which is one of the world's largest funded pension schemes making it a significant investor with the potential to boost growth across the country but presently it doesn't reach its full potential due to the fragmented nature of the scheme and inconsistent standards of governance.

The final report and the wider changes promised in the Kings Speech will form the basis of the Pensions Bill, due to be introduced before the summer recess.