PPF and NAPF Welcome Government Plans to Underwrite Infrastructure Investment
18 July 2012 (PLANSPONSOREurope.com) - The National Association of Pension Funds and the Pension Protection Fund have welcomed plans by UK government to underwrite up to £40bn of investment in infrastructure projects.
The UK government announced the measures today. For plan sponsors infrastructure is a popular asset class as a means for managing defined benefit plan liabilities due to its ability to offer stable cash flows, the fact that it is inflation linked and can match long liabilities over a number of decades.
In November last year the NAPF and the Pension Protection Fund (PPF) signed a Memorandum of Understanding with the UK government to develop the platform to assist pension funds in investing more in infrastructure.
Chief Executive of the Pension Protection Fund, Alan Rubenstein, said: “Both we and the NAPF welcome today’s announcement by the Government that they will introduce guarantees for major UK infrastructure projects. This should give investors, including pension funds, the confidence to provide the financial support that such projects need.
“The announcement should also provide further encouragement to pension fund investors to support the Pensions Investment Platform, which both our organisations are working hard to establish.
“We remain on track to launch the platform as planned in January 2013 and today’s announcement provides a welcome boost.”
Chief Executive of the National Association of Pension Funds, Joanne Segars, said: “The promise of a Government backstop will help give investors more confidence when it comes to funding big infrastructure projects. This guarantee should also strengthen the growing interest among pension funds in the infrastructure investment platform we are working on with the PPF.
“The UK’s infrastructure needs updating and pension funds are on the lookout for long-term, inflation-linked investments – our platform will help match those demands.”