PLSA issues Implementation Statement guidance

Guide was created by the PLSA’s Voting and Implementation Statement Working Group

The PLSA has issued new guidance to UK pensions trustees to produce “meaningful” disclosures through the adoption of Implementation Statements

The body highlighted new duties from the Department for Work and Pensions (DWP) require trustees to a scheme’s Statement of Investment Principles (SIP), which includes how these investments have been implemented and how ESG factors were considered in investment decisions.

With this in mind, the PLSA has issued DB and DC trustees with a guide on how to produce Implementation Statements which covers the following:

  • What the legislation requires and by when;
  • Both general principles and more detailed possible considerations for trustees to produce good statements;
  • The specific considerations around voting behaviour disclosures; and
  • ‘Top tips’ for investment and responsible investment communications.

The guide was created by the PLSA’s Voting and Implementation Statement Working Group (VISWG), a cross-industry group of experts, as well as by a Stakeholder Group comprised of representatives from government, regulators and industry organisations.

Laura Myers, PLSA Working Group Chair and Policy Board member, said: “The recent changes to the Occupational Pension Scheme (Investment) Regulations 2005 have put the onus on schemes to not only provide more details around how ESG considerations impact their investment decisions, but also to improve trustees’ investment decision making and governance more generally.”

“These new regulations require schemes to publish a SIP which sets out how trustees make strategic investment decisions and produce an annual implementation statement to illustrate how these strategic aims have been enacted in practice.”

Caroline Escott (pictured), senior policy lead: investment and tewardship, added: “The Implementation Statements are a very new discipline for trustees, and will require them to carefully consider which investment decisions and activities have or will have the greatest impact on their investment objectives.

“We believe that well-crafted, relevant and interesting disclosures will add real value to beneficiaries in understanding their scheme’s investment approach, including their approach to ESG and stewardship issues.  With policymakers and the public increasingly interested in how schemes invest, we hope that our guidance will provide a useful starting point for trustees and support them in communicating how they invest to protect and enhance the value of individuals’ retirement savings.”

Sarah Wilson founder and CEO of Minerva, an active participant in the PLSA’s expert group assisting in the creation of the guide, said: “This is a once in a generation shift in legal responsibilities for pension trustees. We were delighted to have been asked to help the PLSA with the development of this important resource, which explains how pension schemes can comply with the rules.

“We were also delighted to see the DWP recognize and enshrine in law the importance of stewardship, specifically for schemes to regularly review how their investment managers are exercising their voting rights with investee companies on behalf of scheme beneficiaries.”


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...