Smaller pension schemes could find complying with new implementation statement requirements more difficult than their larger counterparts, Dalriada Trustees has warned.

The trustee services provider cautioned that these schemes tend to use pooled funds and therefore have a less direct relationship with their investment manager, “making it challenging to get direct support from the manager in question".

Implementation statements, which are means for both defined benefit and defined contribution trustees to disclose investment and responsible investment activities, are required to be included within or alongside pension schemes’ annual report and accounts from today (1 October).

Dalriada Trustees professional trustee, David Fogarty, said: “The challenge of compliance would appear to be tougher for smaller pension schemes.

"Larger schemes often use segregated mandates to implement their asset allocation and it is fairly straightforward to assimilate voting and engagement behaviour if you have a direct relationship with the fund manager and your holdings are clearly identifiable.

“The fact you will be paying material fees is also likely to encourage the investment manager to provide the relevant support.”

He noted that early examples showed statements falling short of the new regulations’ requirements as they are “proving challenging for managers”.

Fogarty added: “We suspect also that some consultancies will not have scoped the challenge out in sufficient detail to be able to request and gather data in an efficient and timely manner.

"Guidance from the PLSA, confirmed by the Department for Work and Pensions (DWP) is that if scheme’s have made reasonable efforts to collect the data but are unable to do so that they will not be deemed to be in breach.

“We hope that The Pensions Regulator (TPR) supports this guidance.”

Fogarty concluded: “A ‘pass’ in year one is better than a ‘fail’ but as well as falling short of the letter of the law, a ‘pass’ does nothing to support the underlying principle that as asset owners, trustees should be exerting greater influence over the voting and engagement behaviour of their delegatees.

“As the cost of investment managers providing the required information is non-trivial we expect a fluid exchange of the right information will take more than single scheme or single adviser pressure, instead, it will likely take TPR or the DWP engagement with the asset management community.”

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