Pension professionals have warned the government against changes that could impact fiduciary duty, after Economic Secretary to the Treasury, Andrew Griffith, did not rule out changes to fiduciary duty in encouraging pension investment in UK growth.

Speaking to Griffith, PLSA director of policy and advocacy, Nigel Peaple, asked whether the MP was able to confirm or comment on whether the government intends to leave fiduciary duty in place.

“As a government we want people to have good, prosperous retirements … we want capital to flow productively around the system; you don’t want to deliver performance for people below what they could have achieved with a good diverse range of investments,” Griffith said.

“On the supply side, we want an economy that has got a prodigious number of entrepreneurs, great businesses and lots of innovation to provide that steady growing store of value from which people benefit.

“In that context, the government’s role is to sit down with the industry and try and work out what are the best ways to make that work for everybody.

“So, no definitive answer, to be clear, and the direction of travel is to simply look at and make sure that British long-term savers have the best possible opportunity for good performance.”

During the subsequent panel discussion, Peaple noted that Griffith was not able to say that he was ruling out any changes to fiduciary duty.

“There were a lot of reassuring phrases about how it’s important that actions are taken in the interests of members, but he didn’t rule it out,” Peaple stated.

Given this, he asked the panel on their whether mandatory pension investment overriding fiduciary duty was something they were absolutely opposed to.

“Mandating investment into a particular asset or consolidation is not going to drive the right behaviours or actions,” said West Midlands Pension Fund executive director of pensions, Rachel Brothwood.

“The sort of investments we are being asked to consider are not that clear cut. There are greater risks.

“Fiduciary duty is the absolute bedrock of the whole pensions system. If we start to damage trust and confidence, that could create real irreversible damage for generations to come.

“If there’s one thing that we will all be completely aligned on and should fight for in this room, it's that we retain that safety valve.”

People’s Partnership director of policy & external affairs, Philip Brown, agreed, describing mandatory investments as a “blunt instrument”.

Meanwhile, Railpen chief executive and PLSA Policy Board chair, John Chilman, joked that he would be happy with mandated investment, “provided the government underwrites it”.

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