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ESG: Focus efforts from a risk perspective

Joshua Kendall

From the blog: Every institutional investor should be following a responsible investment approach.

Responsible investment means better managing risk and seeking out more sustainable long-term returns by incorporating a greater number of risk factors, such as environmental, social and governance issues, into investment decisions.

This is fundamentally sensible; ignoring potentially material risks should not be a serious option and may negatively impact performance over the long term as ESG factors become priced by market participants, such as credit rating agencies.

The Weekly Wrap: November 10 edition

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A round-up of the pensions industry stories published across the FT Group – from the Ukrainian fund managers unfazed by bombs and bullets, to the global banks facing a lawsuit for FX price-fixing.

What greater regulatory scrutiny means for small schemes

Vikki Massarano

From the blog: In addition to announcing its new “tougher” stance, the Pensions Regulator has said it will take a more proactive approach to smaller schemes’ compliance with its requirements and expectations.

This followed a survey of defined benefit schemes’ approach to the Pensions Regulator’s DB funding code of practice, showing that while most schemes are currently following the regulator’s standards of governance, smaller schemes are lagging behind.

The regulator has concluded that smaller schemes tend to have poorer governance standards, particularly around assessing trustee fitness and performance, and in relation to taking and managing funding risk.

Patient capital in DC: Worth the risk?

Maria Nazarova-Doyle & Tim Sharp

From the blog: Philip Hammond's desire to increase the allocations of defined contribution schemes to 'patient capital', including high-risk venture capital, have proved a divisive issue in the pensions industry.

DC schemes have long clamoured for access to illiquid assets, but the prospect of watered-down protections on costs and charges have had some up in arms.

Pensions Expert asked JLT Employee Benefits' Maria Nazarova-Doyle and the Trades Union Congress' Tim Sharp for their views on whether greater access to patient capital will be a boon or a burden to DC savers’ retirement outcomes.

The Weekly Wrap: November 3 edition

A round-up of the pensions industry stories published across the FT Group – from the World War II codebreaker taking on the Department for Work and Pensions to New York City’s pensions stand against Saudi Arabian securities.

Autumn Budget 2018: Reaction

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Podcast: Chancellor of the Exchequer Philip Hammond has delivered his Autumn Budget. To mull over patient capital and what might have been, Alex Janiaud is joined by James Riley, council member at the Society of Pension Professionals, and Steven Cameron, pensions director at Aegon.

ESG investing: the temperature is rising

From the blog: From October next year, trustees will be required to make public their policy on environmental, social and governance considerations, to the extent that these may have a material impact on the financial performance of their scheme's investments.

However, even before this trustees need to consider how they can demonstrate that they are taking ESG investing seriously, as the risks associated with paying lip service to it are increasing.

In the UK, ClientEarth are supporting members who are requesting information about their scheme's approach to ESG matters and are threatening legal action if the response is deemed inadequate.

Click here to read the full blog post

JLT switch to TDF default sees boost in engagement

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An overhaul of the default arrangement in the Jardine Lloyd Thompson Pension Scheme’s defined contribution section, switching from a lifestyle arrangement to target date funds, has brought its more engaged members back from their self-select funds.

The Weekly Wrap: October 27 edition

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A round-up of the pensions industry stories published across the FT Group – from increasing pressure on the government to bring in legislation for the pensions dashboard, to a New York lawsuit claiming investors were misled on the risks that climate change regulations posed to business.