Trustees of defined benefit pension schemes are responsible for their scheme’s investment governance arrangements, including determining its investment strategy.
As you might expect, there are strict legal obligations set out under statute surrounding pension scheme investments, including the level of involvement that sponsoring employers may have and the delegation of investment decisions.
We advise trustees on the legal aspects of their powers and decisions, including the provision of training to trustees (and employers alike) to ensure our clients understand their legal duties.
We have a particular interest and extensive experience in pension scheme investment management, working with trustees on all legal aspects of defined pension scheme investments, including the preparation of investment governance documentation (including the establishment of an investment sub-committees) and negotiating investment management agreements and fiduciary management agreements with investment banks and/or consultants.
However, as noted by the Pensions Regulator, a scheme’s investment strategy is likely to have a far greater overall impact than the investment management’s performance relative to their targets. TPR expects suitably documented investment governance arrangements appropriate for schemes’ circumstances and has published extensive regulatory guidance on defined benefit investment and trustees’ legal duties in respect of such investment.
As such, we work with trustees of these schemes to help them understand their responsibilities relating to investments, including ensuring effective governance arrangements, which in turn, breeds member and employer confidence.