Statement on DWP consultation - Pension trustees: investment and fiduciary duties

The Department for Work and Pensions consultation on pension trustees' investment and fiduciary duties is a timely contribution to an important area of pension scheme governance. We welcome the objective to provide greater clarity to trustees when applying their fiduciary duties within an increasingly complex investment environment however, the value of the guidance will depend on it enabling rather than constraining good trustee decision-making.  

Helen Forrest Hall, Chief Strategy Officer at the PMI, said:  

"The pensions landscape has evolved significantly in recent years, with growing discussion around stewardship, sustainability-related factors, long-term investing, system-level risks and wider economic developments. Greater clarity on how trustees can assess financially material considerations in these areas should help support robust decision-making and give trustee boards additional confidence in exercising their judgement.  

"However, it is essential that this guidance remains true to its stated purpose: to explain existing legal duties rather than expand them or create new expectations.  It should enable rather than constrain good trustee decision-making. Trustees must be free to exercise independent judgement based on the specific circumstances of their scheme and members. The guidance should not be interpreted in a way that pressures trustees to pursue particular investment outcomes, policy objectives or government priorities that fall outside their fiduciary responsibilities.  

"The PMI has consistently argued that fiduciary duty must remain member-focused and evidence-led. While developments in investment practice can inform how trustees assess risk and opportunity, they should not be used to stretch the intended boundaries of trustee duties or dilute the principle that trustees, not policymakers, are responsible for investment decisions. 

"As government develops this guidance, it will also be important to consider how similar principles are applied across different parts of the pensions market. Consistency of approach can help avoid unintended differences in decision-making between trust-based schemes and contract-based arrangements, while maintaining appropriate regulatory distinctions. 

"We look forward to engaging with the consultation and working with government and industry stakeholders to ensure the final guidance is practical, balanced and supportive of high-quality trustee decision-making."