Pensions Regulator updates DB investment guidance – responsible investment in the spotlight

The Pensions Regulator, very late in the day and without any announcement, has provided more guidance to trustees on responsible investment.  This is through updating its investment guidance for DB schemes.  This in turn follows the publication of updated investment guidance for DC schemes in June (see Pensions Bulletin 2019/26 and the linked News Alert).

The DB guidance has been updated to reflect regulations made over a year ago (see Pension Bulletin 2018/36), the investment aspects of which set out requirements to disclose policies relating to financially material considerations, non-financial factors (if any) and engagement in the statement of investment principles – and come into force from 1 October 2019.

For some reason (unlike the DC guidance) the DB guidance does not reflect regulations settled in June this year which implement certain pensions aspects of the European Union’s revised Shareholder Rights Directive (see Pensions Bulletin 2019/23 for details).

The guidance also includes some re-writing of the sections on the investment governance of schemes.

Comment

We have commented before on how unfortunate it is that the Regulator’s guidance has been left so late – there is less than two weeks before some of the requirements come into force.  Fortunately, the new guidance is in line with expectations: it is very similar to the DC version released in June and just reflects good practice on responsible investment.

We expect most trustees will have had responsible investment on their agendas for some time and will be about to sign – or have already signed – an updated statement of investment principles.  Those who have previously given serious consideration to responsible investment may not need to take any specific action as a result of the guidance, although all trustees should familiarise themselves with it.  We expect that the Regulator will be proactive about compliance with the regulations.

Parliament returns for now

The unprecedented ruling at the Supreme Court on Tuesday means that Parliament’s prorogation a fortnight ago is null and void and Parliament picks up from where it left off.  This also means that all the Bills that were in train before prorogation get a second life, including those with a pensions flavour on which we recently reported (see Pensions Bulletin 2019/34).  But for how long they will live before Parliament is either prorogued ahead of a Queen’s Speech or dissolved ahead of a General Election one can only speculate.