Partner Rosalind Connor speaks in Pensions Expert on TPR’s response from the watchdog to its consultation of the future of trusteeship and governance and other topics
As Guy Opperman is re-appointed Pensions Minister for the third time, he has pushed for mandatory disclosure of climate change strategies, and encountered some criticism in the Pensions industry.
“It is great to get some continuity because you do begin to feel that Guy Opperman really does begin to understand what’s going on and get his feet under the table.”
“The problem is that set down under law at the moment is very clear that trustees have to maximise returns – that’s what they have to do. Sometimes that’s consistent with taking account of climate change, particularly with long returns investment.
“If the government wants trustees to invest in a pro-climate change way, it’s very simple: they put another line in that Bill, saying that the principle of Cowan v Scargill in the leading case, which says you have to maximise returns, does not apply to the extent necessary to take into account the most important issues of climate change. It’s a bit messy, but if you’re going to actually try and change behaviour, that’s the way to do it.”
“One of the problems I think that is missed by most of the policy makers in relation to pensions is that most investments are not direct. Virtually no pension scheme invests directly, apart from the very large ones and usually then that’s not investment into companies.”
In the same week TPR, also published new rules for trustees, with some criticising the watchdog for not risking enough and taking a safe approach in this area.
TPR published last week its response to the consultation the Future of trusteeship and governance, where it announced that they will be conducting checks on trustee knowledge, but also announced there will not be a requirement to have a professional trustee in every board, and that they will not be taking any actions on sole trusteeship.
“Being a pensions trustee is a challenging role, but it is clearer now and that makes it easier. People who are trustees of Master Trusts are now very comfortable about what it’s expected of them. One of the great things about the continuing supervision after the authorisation process is that if they are not sure, they have a ‘bloke to call in Brighton’ and that’s made a world of difference to people’s lives.”
Listen to Rosalind’s commentary in Pensions Expert here.
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