Is AAF fit for today? What should Trustees be considering?
Is AAF fit for today? What should Trustees be considering? AAF 01/20 reports began appearing
The Changing Face of Professional Trusteeship
UKSIF’s recent report, Unlocking UK Pension Capital for Sustainable Growth, presents a timely and constructive agenda to help realise the full potential of the UK pensions system in supporting long-term, sustainable economic growth.
At Pi Partnership, we welcome this intervention, particularly its emphasis on enabling investment through sound policy and regulatory design, rather than mandates that risk undermining trustees’ fiduciary responsibilities. The report rightly highlights the UK’s £3 trillion in pension assets as a powerful, but currently underutilised, source of long-term capital. Unlocking this potential requires removing structural barriers and giving trustees greater clarity and confidence.
Two themes in particular resonate with us:
From Investment Targets to Enabling Conditions:
UKSIF shifts the focus from mandated allocations to the real-world conditions in the UK that make investments viable. Key enablers include coherent policy and regulatory frameworks, systematically addressing structural investment barriers (e.g. planning permissions), and ‘crowding-in’ private capital through government-backed institutions like the National Wealth Fund. This aligns with our belief that trustees should be empowered to seek long-term, value-aligned investments where the right opportunities exist – without pressure to meet artificial targets. Mandates risk distorting decision-making, reducing investment returns, and eroding trust. It’s about enhancing the supply of investible UK assets, not imposing demand quotas.
Clarifying Fiduciary Duties:
We also support the call to clarify fiduciary duties in relation to UK and sustainable investments. Building on the 2024 conclusions of the Financial Markets Law Committee, further regulatory guidance would give trustees greater confidence when aligning investment decisions with beneficiaries’ long-term interests – particularly in light of evolving views on materiality, time horizons relevant to pension savers, and considerations beyond investment returns.
The report also addresses other critical areas, including improving adequacy through progressive auto-enrolment reforms, updating sustainability reporting standards for decision-usefulness, and evolving the Value for Money framework to support long-term, sustainable investment strategies.
As a professional trustee firm, Pi Partnership supports a pensions policy framework that is stable, enabling, and aligned with broader government initiatives. We hope this report prompts a forward-looking dialogue between policymakers, regulators, schemes, trustees, and managers—ensuring pension capital contributes meaningfully to growth and resilience in the UK, securing member outcomes.
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