Statement of investment principles (SIP)
Produced in partnership with Nick Stones of Pinsent Masons
Statement of investment principles (SIP)

The following Pensions guidance note Produced in partnership with Nick Stones of Pinsent Masons provides comprehensive and up to date legal information covering:

  • Statement of investment principles (SIP)
  • Statutory requirement to prepare a SIP
  • Who does the SIP requirement apply to?
  • Contents of SIP
  • Why expand SIP content requirements to cover ESG, stewardship, non-financial matters and the asset manager policy?
  • SIP policy on compliance with section 36
  • SIP policy on financially material considerations
  • SIP policy on non-financial matters
  • SIP policy on stewardship matters
  • SIP asset manager policy
  • more

FORTHCOMING DEVELOPMENT 1: The March 2018 White Paper ‘Protecting Defined Benefit Pension Schemes—A Stronger Pensions Regulator’ identified concerns about a lack of accountability and clarity on what a good DB funding strategy is, thereby resulting in poor scheme funding and investment decision-making sometimes focused on the short term. The government therefore expressed the intention to legislate so as to require DB trustee boards to appoint a chair and for that chair to report on key scheme funding decisions to the Pensions Regulator (TPR), including how the funding standards are met and how the scheme funding objective is set in line with a long term funding objective. Reflecting this, the annual funding statement published by TPR in March 2019 also set out TPR’s expectation that trustees and employers of DB schemes should agree a long-term funding target. After a first failed attempt to legislate on these measures (through the Pension Schemes Bill 2019), the Pension Schemes Bill 2020 was reintroduced in Parliament on 7 January 2020. This 2020 Bill (which differs from its 2019 predecessor only in minor ways) will require DB trustees to have a ‘funding and investment strategy’ for the purpose of ensuring scheme benefits can be paid over the long term. That strategy is to be set out in a ‘statement of