The proposed reclassification of local authority pension funds as retail investors would put infrastructure investment at risk, pension experts have warned.

Responding to a consultation from the Financial Conduct Authority (FCA) which closes today, the Pensions and Lifetime Savings Association (PLSA) warned the majority of infrastructure investment firms are structured to explicitly exclude retail investors.

With a recent survey showing 1.1% of council pension fund assets are invested in infrastructure, this would put £2.7bn investment at risk, according to the PLSA.

‘Reclassifying local authority pension funds as retail investors will prevent them from investing in certain asset classes such as infrastructure,' said Graham Vidler, director of external affairs at PLSA.

‘With local government pension scheme funds investing billions in infrastructure right now and at a time when the Government is calling for greater infrastructure investment by pension funds these proposals are counterintuitive.'