Investment

Investment

Investing scheme assets is a key responsibility for trustees of occupational pension schemes in order to ensure that:

•
in the case of a defined benefit (DB) scheme, they can pay benefits to beneficiaries as they fall due
•
in the case of defined contribution (DC) scheme, members have a pensions pot which they can use for their retirement

Investment powers and duties of pension scheme trustees

Trustees have a wide statutory power to invest scheme assets under section 34(1) of the Pensions Act 1995 (PA 1995). The trust deed and rules of a scheme usually also confer on trustees a power to invest the scheme assets. Trustees should also ensure that they invest scheme assets in accordance with the scheme's investment power, which may be more restrictive than the statutory power to invest.

Since most trustee boards will not include individuals who are qualified and authorised to manage investments under the Financial Services and Markets Act 2000 (FSMA 2000), trustees commonly delegate their powers to make day-to-day investment decisions to a professional fund manager, as permitted by statute (PA 1995, s 34(2)).

Trustees'

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Pensions News

Third of DC pension savers have under £10k in pension pots, FCA finds

Law360: One-third of UK adults with a defined contribution (DC) pension scheme have less than £10,000 accumulated in retirement savings, the Financial Conduct Authority (FCA) has found.

Government warned over mandating UK pension funds investment

Law360: The government must avoid introducing a legal requirement on UK pension plans to invest a proportion of their funds in domestic assets, WPI Economic, a consultancy has warned.

DWP confirms government review of pension transfer process as concerns over transfer delays spark reform debate

In a written parliamentary question raised by Zarah Sultana MP addressed to the Secretary of State for Work and Pensions, she asked what measures the Department were taking to enhance transparency and consumer control in defined contribution pension transfers when these transfers are not executed on a specific date or at a specified value. In response on 16 May 2025, Torsten Bell, Minister for Pensions on behalf of the Department for Work and Pensions (DWP), confirmed that the DWP is working with regulatory bodies, the pensions industry and other stakeholders to identify and explore potential changes to pension transfer processes to enhance efficiency while also maintaining consumer protection. In particular, the DWP explained that it has engaged with other government departments, pensions institutions, consumer organisations as well as the pensions industry to consider if the practical application of the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021, SI 2021/1237 could be improved.

Government consults on local government pension fixes to tackle discrimination

Law360: The government proposes making all maternity, shared parental and adoption leave automatically pensionable for members in the Local Government Pension Scheme (LGPS), among a raft of other changes it said would boost benefits and end 'years of discrimination' when it published a consultation on 15 May 2025.