It’s always about investment

by | Apr 13, 2023 | Pension History

It’s always about investment.

In March 2020 the Pensions Regulator published guidance to pension trustees about the conflict in Ukraine. Noting that schemes were adopting a range of responses, from writing down the value of Russian assets to disinvesting entirely where practical, it reminded them that they needed to prioritise their fiduciary duties “although you can also take account of other factors, such as member views on ethical and social governance. Your decisions should also reflect your scheme’s investment policy as set out in the statement of investment principles.”

The extent to which member views should influence investment policy is not straightforward and schemes and their advisers will differ on their approach to the underlying legal and practical issues. It is not easy to gauge member views in a large pension scheme or to ensure that trustee responsibilities are not in practice delegated to pressure groups or consultant ‘groupthink’. And in a defined benefit scheme where the employer pays the balance of cost, the trustees will be mindful of the desirability of making investments as productive as possible.

In a 1969 speech to the Institute of Chartered Accountants of Scotland, George Ross Goobey, the first manager of the Imperial Tobacco Pension Fund, made a plea for sentiment to be banished in the choice of investment. He pointed out that even if one didn’t read a particular newspaper plenty of people did, so that investing in it might be worth considering!

Pensions Archive Trust Director, Jane Marshall

This article was first published in the March edition of Pensions Age magazine.