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Your support makes all the difference.<\/strong>Read more<\/p>\n The chief executive of Lloyds<\/a> Banking Group has warned the government against plans to force pension funds<\/a> to invest in British assets, likening such a move to the type of policy used in communist China.<\/p>\n Charlie Nunn also cautioned that the plans could be \u201cin conflict\u201d with their primary goal of seeking the best returns for pensioners.<\/p>\n Labour\u2019s wide-ranging pension reform includes the creation of megafunds<\/a> \u2013 eventually each investing more than \u00a325bn \u2013 with one key idea being that lower fees could mean more money for those who have pensions<\/a> within them.<\/p>\n But alongside that, forthcoming legislation change is expected to include a superpower to allow what the Treasury<\/a> says is \u201cto set binding asset allocation targets\u201d, which could see the government essentially force pension funds to invest set minimum amounts in UK assets.<\/p>\n But Mr Nunn has cautioned that governments setting those allocation targets could mean funds are prevented from complying with their legal duty to provide the best possible returns – and also compared the use of force to a form of State-imposed control in China.<\/p>\n \u201cMandating allocations of pension funds is a form of capital control. I have spent 10 years of my working life in China and many jurisdictions where there are capital controls,\u201d Mr Nunn told the FT.<\/p>\n \u201cThat is a different model and that is a difficult slope for an economy that believes it is an open economy.\u201d<\/p>\n The Lloyds Banking Group, as well as owning Lloyds, Halifax and Bank of Scotland, owns the Scottish Widows<\/a> retirement and pension fund. Lloyds also already has \u00a335bn allocated to investing in British assets, noted Mr Nunn.<\/p>\n There has been an ongoing debate over whether UK businesses are undervalued versus overseas equivalents due to a liquidity shortfall and a lower risk tolerance, along with how best to narrow that gap and encourage more firms to grow within Britain.<\/p>\n