Summary
The Government has published its response following the consultation on amendments to trustees’ duties in relation to pension scheme investment, as well as new regulations that introduce new requirements in relation to Statements of Investment Principles.
Background
The Government proposed, in its consultation, that, when preparing or revising their Statement of Investment Principles (“SIP”), trustees should:
- set out how they take account of financially material considerations, including (but not limited to) those arising from ESG considerations, including climate change,
- set out their policies in relation to the stewardship of the investments, including engagement with investee firms and the exercise of the voting rights and
- prepare a separate “statement on members’ views”, explaining how they will take account of views they believe members to hold in relation to the matters covered in the SIP.
In relation to most schemes that offer money purchase benefits trustees should:
- publish their SIP on a publicly-available website – and inform scheme members in their annual benefit statement how they can access the SIP – and
- update their default investment strategy to set out how they take account of financially material considerations, including (but not limited to) those arising from ESG risks including climate change.
The consultation proposed also that, a year later, trustees should publish a statement explaining how they have implemented the principles described in their SIP (schemes with money purchase benefits only) and taken account of members’ views (all schemes).
Government response
The Government has dropped the requirement to include a statement on members’ views; however, all the other provisions will come into force on 1 October 2019 (2020 for the requirement to publish an implementation statement).