Are pension fund trustees fiduciaries?

Author: IFLR Correspondent | Published: 21 Mar 2019

By Matt Ruoss, CEO, Scorpeo

Fiduciary duty is about acting in the best interest of beneficiaries, and while the primary mandate of pension funds is the creation of financial returns, the extent to which this goal is achieved sustainably – in relation to governance and ESG [environmental, social and governance] – is a matter for trustees to decide.

Over the last few years there has rightly been a growing concern among trustees as to whether their financial and non-financial actions could give rise to a breach of fiduciary duty.

In 2014, the UK Law Commission produced a report on the fiduciary duties of investment intermediaries that provided further clarity. It stated:

"Whilst it is clear that trustees may take into account environmental, social and governance factors in making investment decisions where they are financially material, we think the law goes further: trustees should take into account financially material factors."

Since fiduciary duty...