Figures within the pensions industry have warned against any kind of encroachment on trustees’ fiduciary duty, as the debate around investment mandation continues.

Speaking at the Pensions UK Annual Conference, panellists were asked whether they were worried about any further political changes.

Universities Superannuation Scheme (USS) chief pensions strategy officer, Melanie Duffield, said the key ‘watch items’ for the scheme were anything around the mandation of investments.

“On the one hand, a scheme of the scale and investment capability of USS can show what you can deliver in terms of private market investments, but we would also argue quite strongly that is a red line from our perspective,” she stated.

Duffield said the scheme had concerns about any kind of ‘encroachment’ around the integrity of fiduciary duty, describing it as a “live issue”.

“The thrust of the reforms clearly has a very positive intent; there’s always a number of watch items that we are concerned will undermine our ability to do our job in working for members’ best interests,” she added.

LGPS Central CEO, Richard Law-Deeks, said he agreed with Duffield’s comments on fiduciary duty.

“It has worked for a long time, and I do worry that trying to modify it is just going to have unintended consequences,” he stated.

Brightwell CEO, Morten Nilsson, noted there was a temptation to ask or force pension schemes to invest in the UK, but argued that schemes were already investing a lot in the UK.

“I would much rather governments focus on ‘how do we make this the most attractive place to invest for our local pension schemes?’ ‘How can we make partnerships with our local pension schemes, where they can support what the government is trying to do but also get what we need in terms of returns?’,” he added.

Discussing the defined benefit (DB) pension reforms, such as surplus release, Nilsson said that the detail and support given in guidance would be critical.

“If there isn’t enough guidance and if the guidance is too restrictive it won’t get us anywhere, it will be a waste of time,” he stated.

Law-Deeks called for no mention of pensions in the Budget, noting that as there was so much change underway, the sector needed time to bed in all the changes it is trying to deliver.

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