Law Commission review of fiduciary duties - NAPF comment
22 October 2013
The National Association of Pension Funds (NAPF) has welcomed the Law Commission review of fiduciary duties of investment intermediaries today (Tuesday).
Will Pomroy, Corporate Governance Lead said:
“The NAPF welcomes any efforts to increase the clarity and understanding of the legal obligations arising from fiduciary duties and looks forward to engaging with the Law Commission’s review.
“We believe that the debate concerning fiduciary duty, which comes as a direct consequence of the Kay report, is useful and would help clarify the role of fiduciary concepts in pension scheme management.
“From our discussions with NAPF members and their advisers we are of the view that the fiduciary duties of trustees of pension plans are well understood. Trustees understand that their duty is to act in the best interests of members. There is sufficient scope under current law for trustees to take a longer-term view and consider wider factors. We welcome the recognition that a pension funds primary duty is to pay pensions.
“The Law Commission recognises that the duties on contract-based pension providers are much less certain and need reviewing. We agree, much of the apprehension concerning contract-based schemes could be addressed more directly through clear standards of conduct applicable to employers and providers in those areas in which they exercise discretion.”
The Law Commission shines a light on the investment market through the lens of pensions. The Commission looks at how far fiduciary duties require trustees to maximise financial return over a short time scale, and how far trustees can consider other factors, such as environmental and social issues. It also highlights contract-based pension providers and others in the investment chain where fiduciary duties are much less certain.
Notes to editors:
1. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
2. Click here to read more on the Law Commission review
Dee Sullivan, Head of Media and PR, (interim), 020 7601 1717 or 07917 506 683, [email protected]
Aimee Savage Richards, Press Officer (interim), 020 7601 1718 or 07825 171 446, [email protected]