Scouting out the youngest attendee at a conference tends not to be at the top of everyone’s agenda, but for Sarah Smart, the Chair of the Pensions Regulator, it was, and that person was me.

Having been fortunate enough to attend the 2024 PLSA Investment Conference free of charge thanks to the PLSA and NextGen, I was one of the few from my generation able to hear from industry experts on the evolution of the pensions landscape. My conversation with Sarah set the tone for the conference which highlighted the importance of DE&I and sparked insightful discussion on navigating the current intricacies of the industry.

I’ve detailed my key takeaways below.

Implications of an Evolving Landscape

With a shift from DB to DC pensions, coupled with stagnant GDP and an ageing population, the UK is going to have to face up to the political and economic consequences of intergenerational wealth disparities. Many of the talks at the conference centred around this point, rendering the need for innovative investment strategies within pension funds more necessary than ever. It highlighted the importance of future proofing investments through innovation and adaptation to benefit future generations, particularly in an investment landscape shaped by geopolitical and economic uncertainty.

Lynda Gratton, Professor of Management Practice at London Business School, hosted a session on ‘Megatrends Shaping Our Future’ which built upon this shift in landscape. Lynda covered megatrends such as longevity, technology, and evolving social dynamics, all evidencing the need for change. Two main points from her session that stood out to me were:

1. Longevity: People are living longer and therefore working longer.
2. Social dynamics: People are moving away from the three-stage model of life (education, work, retirement) and towards a multi-stage life (a flexible life structure; leisure, work, sabbaticals, learning, caring, etc…).

These megatrends highlight the way the world is changing and support the view that historic pension policies are no longer financially viable and therefore our system needs to adapt to meet the evolving needs of society. Additionally, Paul Maynard MP, Minister for Pensions, acknowledged the changing landscape and promised political will to foster a pensions savings system catering for all demographics. A promise I hope to see come to fruition despite current political uncertainty.

Innovation and Adaptation: Illiquids, ESG, and Technology

The shift in landscape outlined above reinforces the stance that the auto-enrolment cohort are no longer going to have ‘a pot for life’. Many speakers at the conference therefore focused on making the most of the pot savers do have through innovation and adaptation.

With a focus on future proofing investment strategies, there were various sessions on integrating Private Markets into pension fund portfolios. The idiosyncratic nature of illiquid assets offers additional growth and diversification and therefore has the potential to contribute to the evolution of DC, creating resilient investment strategies to weather uncertain environments. Furthermore, ESG opportunities within Private Markets create a strong narrative to engage members whilst aligning their investment strategy to their journey. However, it was highlighted that due to the heterogenous nature of Private Markets, ESG data availability is difficult and therefore more needs to be done, such as consistent industry frameworks, to ensure we get the most out of the strategy.

ESG considerations ran throughout the sessions, and it is evident our industry recognises their role and ability to make positive impact through ESG focused investments, but more needs to be done to act upon this recognition. One interesting statistic that stood out to me was that our world has lost 69% of biodiversity since 1970. As the world begins to confront this vast loss of nature and strive towards net-zero commitments, this statistic evidenced that biodiversity is a non-negotiable consideration for pension funds and investors. A further reminder of the collective responsibility of our industry was being met by climate protestors on the second day of the conference, emphasising the external awareness of the role we have to play.

Furthermore, it was evident at the conference that in a landscape of significant technological advancements, our industry needs to utilise technology to deliver better and more tailored member experiences. Julius Pursail from Cushon referred to this as the ‘Amazonification of pensions’. I did some research into the buzzword and came across the heading “Amazon Prime – much more than free shipping”. It reiterates that people don’t just use Amazon for the free shipping but for the ease of the app, the seamless customer experience, and the affordability of products. If pension providers want to strive for a similar reputation, they ought to offer far more than just later life income, such as tailored financial guidance and a seamless member journey, all by utilising the latest technology.

Diversity, Equity, and Inclusion; You Cannot be What You Cannot See

Innovating and adapting strategies through illiquid investments, ESG, and technology aren’t the only ways to deliver better member outcomes. The necessity to have a diverse workforce in the industry is evident. Not only did the ‘Driving DE&I’ session highlight this, but it pushed a relatable perspective; why, in an industry centred around performance risk, are we not recognising a lack of DE&I as a key risk to performance?

It was encouraging to see the enthusiasm from the panel to not only discuss DE&I from a cultural perspective but also a generational one. The Chair of the Pensions Regulator sat on this panel and from my interaction with her earlier on at the conference, I was intrigued to hear her opinions. Sarah spoke about the importance of changing people’s attitudes to see the value of the younger generation. Like the previous NextGen member who attended last year’s PLSA conference, I too was one of the few from my generation present. I’m hugely grateful for NextGen and PLSA for the opportunity to attend, however I would love to see greater accessibility to events like this for my generation. The PLSA Investment Conference provides three days of learning, development, and networking; three things arguably most important to those at the start of their career. When the conference centres around the future of pensions it makes sense to have the representation of those who will be driving the future of the industry at the heart of the discussion.

From addressing intergenerational wealth disparities through innovative investment strategies, to highlighting DE&I as key performance risk, the 2024 PLSA Investment Conference illustrated the evolving landscape of pensions. I believe the enthusiasm shown for illiquids, ESG, technology, and DE&I reflects this evolving landscape, however, the future success of the industry to deliver real-world impact relies on its capacity to embrace change, foster innovation, and uphold inclusivity.

Hettie is a Graduate Analyst in LGIM’s Distribution team, gaining experience of LGIM’s DC, DB, and Wholesale clients, sales strategies, and stakeholders. She joined LGIM in 2022 from Newcastle University where she completed a Law degree. Hettie is also Co-Chair of Legal & General’s Women’s Network, aiming to empower and connect women across the business by fostering a supportive community that encourages professional growth, mentorship, and collaboration. In 2023 she was shortlisted for both Young Achiever of the Year and Trainee of the Year at the Professional Pensions Awards.