"Going forward it's all about scale because it allows you more buying power, and you have more contributions going in. Pensions tend to be a low margin business – they don't have lots of money."
In addition, just before the Budget, HM Treasury announced that among the reforms, poorly performing schemes would not be allowed to take on new members.
Backing Britain
A more controversial initiative is the prescriptive from the chancellor for pension funds to invest more in British business, a clear statement of intent, also in the Budget earlier this month.
In his speech, Hunt said: "We will make sure there are vehicles to make it easier for pension funds to invest in UK growth opportunities."
But he is going even further than this and is drawing up plans to make pension schemes disclose how much they are investing in UK businesses.
In a statement released earlier this month, HM Treasury announced reforms whereby: "By 2027 DC pension funds across the market will disclose their levels of investment in British businesses, as well as their costs and net investment returns.
"By ensuring pension funds publicly disclose where they invest and the returns they offer, it will make it possible for employers and savers to compare schemes and make informed choices."
This statement has been met with some consternation by those in the investment field, not least as it is close to saying that government is giving trustees investment directions.
Dabrowski says of his members, who are workplace pension schemes: "They are largely resistant about being told what to do.
"Their fiduciary duty is to invest for the benefit of members, not for your societal goals.
"If I had been told to invest 10 per cent of my portfolio in UK [rather than the US] over the past 10 years, my returns would have been gradually smaller in comparison, given the US equity bull run, and my members would have been worse off, and not looking after them means [breaching] the fiduciary duty."
He adds: "If you're directing people to a market, you can create concentration bubbles; there aren't enough assets to choose from and people will be chasing the same assets."
Many believe that this stated plan has little to do with benefiting pension funds at all.
Page at Mercer says: "With my slightly cynical hat on, they have a funding gap for UK PLC, and we've got lots of money in pension funds".
But the requirement to invest in UK companies aside, the pension sector does appear to be accepting of the move to scale up, at least if it frees them to invest in more ambitious assets.
