Julius Pursaill, an adviser to the Cushon Master Trust, says highlighting the connection between private markets and retirement outcomes helps to create ‘task persistence’ among members
The possibility that trustees may be compelled to allocate to UK private market assets has been met with considerable pushback, notwithstanding broad industry support for the Mansion House Accord. Trustees of course want to be free to exercise their fiduciary duty free from mandation, but should they, in principle, be wary of allocating to UK private market assets?
I have a very high level of confidence that allocating DC default funds to UK private market assets will deliver better member outcomes. Why am I so confident? Because private market assets interact positively with member outcomes in at least three different ways.
First, we can reasonably expect private equity to deliver returns in excess of the listed equity allocations from which they will probably be drawn. Some will disagree, and manager selection (and costs) are clearly key, but it’s a fact that listed markets are becoming thinner and more concentrated as companies either choose to list later, or not at all. Private equity and venture capital allocations offer access to return drivers that listed equities alone do not.
Second, trustees must take into account the impact of their investment decisions on their members’ standards of living in retirement. As the vast majority of their members will retire in the UK, trustees have a strong rationale to allocate to UK businesses.
A positive impact on standards of living in retirement can come from both the specific (allocations to health and social care for example) and from the general (a healthier UK economy is in all pensioners’ interests).
But the most important, albeit to-date the least realised, is the interaction between private market assets, their impact on the society in which members (and their families) live and work, member engagement and better member decision making.
Task persistence
There is extensive empirical evidence, across many sectors, that emotionally engaged customers exhibit something called ‘task persistence’. In this context, task persistence means members being more willing to engage with relevant provider content. Investments in a local business providing employment, new farming practices, local housing for nurses and teachers, a new treatment for cancer or diabetes, a local wind or solar farm or nature restoration can all create those emotional connections.
Once created, that task persistence can be leveraged into higher contribution rates at an earlier age, better decisions around the timing of benefit vesting and, crucially, better decisions about the form in which those benefits are taken.
This isn’t easy; alongside a portfolio of UK wide assets, delivered via DC friendly operational architecture, it requires technology that can serve up relevant personalised content to members, both to create and leverage that task persistence, and to do so in a way which is welcome rather than annoying.
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Creating an emotionally engaging user interface that embeds simple and rewarding decision making has proved challenging for most pension providers. But the prize is enormous.
We all know how difficult it is to engage DC members at a point in their journey when they still have time to make decisions that will improve their outcomes in retirement. And we know why: hyperbolic discounting – a behavioural bias that sees people favour smaller, immediate rewards over greater rewards in the future – is well documented and challenging to overcome.
Making members feel good about their pension delivers value for those members in the here and now (as well as in thirty years’ time!) and is the obvious way of overcoming hyperbolic discounting.
For those providers who can execute this strategy successfully, it will prove transformational. Not only will their members experience better outcomes, but the provider will benefit from more assets under management (via both higher contribution rates and more transfers in) and will keep them for longer (via higher customer retention), particularly across the otherwise high-risk inflection point between accumulation and decumulation.
Julius Pursaill is an adviser to the Cushon Master Trust. He will be speaking at Private Markets Profile’s Inside the Deal conference on 25 February 2026.