News for trust-based schemes
TPR has continued to express its support for trustees taking action on climate change and moving to a net zero UK. It recently undertook a consultation on its new guidance to support trustees with their duties and, in August 2021, took the opportunity to share a few thoughts on this initiative in a recent blog.
TPR’s key thoughts are:
The new regulatory requirements on trustees begin to phase in to the first schemes from October 2021, with the requirements gradually being implemented for smaller schemes over the coming years. TPR expects 81% of pension members to be in schemes meeting these regulations by 2023.
TPR stresses that, whether trustees believe it is right or prudent to build climate risk into pension strategies, both reasons are valid as climate risk is a systemic risk and pension schemes must make a difference in moving to a net zero economy.
The responsibility lies with trustees to set objectives. They will, of course, need to work with advisers and asset managers to deliver this, but the initiative must be taken by trustees who should challenge their advisers if appropriate.
A recent survey of trustees and pension professionals by XPS Group confirms a strong belief that more needs to be done, not only to embed principles within pension schemes, but to monitor and hold investment managers to account.
It is important for trustees to familiarise themselves with the new requirements, when they will impact their scheme and what steps need to be taken to meet them.
However, everyone involved with pension schemes should consider the environmental impact of their pension scheme be it a trust, master trust or GPP, to not only ensure it aligns with their needs and the members’ needs, but also contributes towards a sustainable future.
At PS Aspire, we truly believe that the pension schemes we support can have a positive impact on the world, while promoting good outcomes for savers. Please get in contact with your usual consultant to discuss how we can support you further.