LONDON – British Treasury chief Rachel Reeves will announce plans later on Thursday to merge dozens of pension funds to free up tens of billions of pounds for investment and bolster the UK’s economic health. below average economic growth.

The creation of funds called “megaphones” would represent the “biggest pension reform in decades”, Reeves will say in comments released by the Treasury ahead of his speech to financial leaders in central London.

In his first speech at Mansion House, an annual ritual for British chancellors of the exchequer, Reeves will say the changes could help free up 80 billion pounds ($100 billion) for investment. Pension funds invest in various assets such as stocks, bonds, real estate and infrastructure to increase the retirement rights of their members.

The proposed merger of 86 local government pension funds in England and Wales resonates with schemes being run in Australia and Canada, where pension funds are widely seen as taking advantage of their larger size to invest in assets and boost growth. The new Local Government Pension Scheme in England and Wales is planned to manage assets worth around £500bn by 2030.

The new Labor government will introduce the reforms to parliament in a new bill next year. Early indications are that it has broad support across the political divide (the former Conservative government also indicated it would follow this route) and in the pensions sector.

“Larger pension plans can help deliver better outcomes for savers through economies of scale, stronger governance, negotiating power and additional resources,” said Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association. We bring the industry together and promote best practice.

Business leaders cautiously welcomed the reform plan but said the government needed to work hard to win their support. Reeves’ tax increase budget last month.

Louise Hellem, chief economist at the Confederation of British Industry, said: “With the budget imposing additional costs on firms and narrowing opportunities for investment, the government must work hard to regain confidence in the UK as a place where businesses and communities can thrive.”

“Pension schemes will want to operate in a thriving UK economy,” he added.

Since the global financial crisis of 2008-9, the British economy has underperformed compared to previous years. The main aim of the government is to support growth. Friday’s figures are expected to show the economy barely grew in the second quarter of the year.