By Sarah Mortimer
LONDON, March 6 (Reuters) - The British government has made it easier for local authority pension schemes to invest in infrastructure by doubling the amount they can invest to up to 30 percent of their assets, paving the way potentially for billions of pounds of investment to be made in projects such as new roads and railways.
The National Association of Pension Funds (NAPF) said on Wednesday that from April local government pension funds will be able to raise the amount they can invest in key infrastructure projects from 15 percent to 30 percent of their assets under new rules set by the government's Department for Communities and Local Government.
Britain's local authority pension schemes had been lobbying the government for more leeway to invest in infrastructure, arguing that current rules were hampering their investment in the sector.
"Many local authority pension funds have told us that they are prevented from making the best decision on investments because of outdated rules which place limits on the amount that can be invested in infrastructure," Darren Philp, policy director at the NAPF, said in a statement.
A new Pensions Infrastructure Platform (PIP) has been launched as a way for pension funds to invest in capital projects with the backing of six large pension schemes, including the London Pension Fund Authority (LPFA), West Midlands Pension Fund and Strathclyde Pension Fund.
Volatile equity markets and rock-bottom interest rates have already caused a surge in new pension fund money going into transport and other major facility projects.