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Financially material ESG factors, including but not limited to climate change, may affect the financial performance of a pension scheme’s investments or a sponsoring employer’s covenant.
So, if trustees fail to consider these factors, their savers’ pensions may be at risk.’’
TPR want to see trustees demonstrate that they are considering these factors and properly protecting their savers’ pensions. TPR will check that trustees of schemes with 100 or more members have published a statement of investment principles (SIP), which details the policies for how a scheme invests, including consideration of financially material ESG factors including, but not limited to, climate change. Trustees must also publish an implementation statement (IS) – which shows how the principles in the SIP have been implemented.
TPR further stated:
‘‘This is a basic requirement and it’s a vital way of trustees demonstrating they are protecting savers’ retirement outcomes from risks.
We are monitoring the situation and expect to see compliance improve. We are warning trustees of schemes in scope that enforcement action may be taken against them if they fail to publish their SIPs and/or IS.
We do this in the hope it will drive compliance and avoid us using our powers, which include a fine of up to £50,000 (where the trustee is a corporate body).’’
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The IFS launches a new pensions review Published: 21 April 2023 Emailed: 26 April 2023
The Institute for Fiscal Studies (IFS) launches a major new multi-year review of pensions in the UK and the future of financial security in retirement. The pensions review assesses what pensions policy and the economic environment mean for future retirees’ living standards, recommending reform options and is an extensive two-and-a-half-year project.
With many economic and policy changes occurring, the IFS believes there is now need for a major review into the pension system.
The review will focus on three key questions:
• are people saving appropriately for retirement, in terms of both the amount and the form of saving, and if not, how can government policies help? • how should the state support people from late working life into and through retirement? • do people require more assistance to use their wealth appropriately through retirement?
The IFS said:
‘‘This major review – the first since Lord Turner’s Pensions Commission twenty years ago – will assess future risks and determine what needs to be done to secure decent retirement outcomes for current working-age generations.
It may seem odd to launch such a review when the current generation of pensioners is doing better than any in history. But in a new report to launch the Review we warn that this success may be blinding us to the challenges facing future generations who are unlikely to fare anything like as well.
The collapse of defined benefit pensions, the end of annuitisation, very low levels of pension contributions, and much lower rates of owner occupation could combine to heap risks onto those retiring in the coming decades.
We need a major review of pension provision now in order to give us a chance of avoiding a future that looks much worse than the present. ’’
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