Heineken boosts transparency with statement of investment principles

The Pension Regulator’s occupational governance survey released last week revealed that only 54 per cent of trust-based defined contribution schemes had reviewed their principles in the past three years, even though it is a legal obligation.

It is good practice to have one, and it also presented us with an opportunity to provide investment information

“Our governance committee has produced a statement of investment principles, which we believe remains highly unusual for contract-based plans,” said Carol Young, Heineken’s UK pensions manager and chair of the governance committee.

The scheme made the decision “to provide members with clear and transparent definitions and guidelines with regard to investments,” according to the committee’s most recent newsletter.

The SIP is a continuation of Heineken’s mantra of being “committed to good governance in our pensions arrangements”, Young said. The statement was put together by the scheme’s governance committee, which was put in place when the the contract-based DC plan was created in 2011.

“Some members of our committee, myself included, have an investment background, and so it was natural for us to want to have a single document which contained all the relevant investment information relating to our plan,” Young said.

“We also wanted to capture the thinking that had gone into the design of our investment fund range, our investment objectives [and] beliefs.”

The document was created together with the plan’s advisers, consultancy KPMG, and the scheme management decided to make it available to members through a personal retirement section of the HR portal.

Young added: “Our drivers were that we believe it is good practice to have one, and [it] also presented us with an opportunity to provide investment information to our members in a transparent way.

“We have a standing item in our annual calendar/business plan for review of the SIP but clearly we would review it more frequently if a change was required.”

Last month insurer Aviva announced it was to follow competitor Legal & Generalin creating a governance committee for its group personal pension

Lee Hollingworth, head of DC consulting at Hymans Robertson, welcomed any improvement in contract-based governance, but added: “The governance issue is best dealt with at an employer level, through a well-run governance committee.”

John Lawson, head of corporate benefits policy at Aviva, said: “Contract-based schemes are often characterised by ill-informed individuals as ‘governance vacuums’. This is simply not the case.”

He added: “The weakest governance is in trust. The regulator’s work confirms this point.”

The Heineken plan has exceeded its own returns benchmark in its first year of operation, according to the governance committee’s newsletter.

“We welcome any developments in the industry which look to promote effective pensions governance,” added Young.