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Pension scheme trustees have significant responsibilities, which require expertise and industry-wide experience, writes James Kavanagh (pictured)

The OECD recently reported that pension assets in the OECD region have grown over the last decade to some US$44 trillion worldwide. In Ireland, pension assets represent 33.9% of GDP. For such vast sums of money, what is a current key consideration for trustees of Irish pension funds?

For TRUSTEE DECISIONS, we believe we are first mover leaders in having a focus on responsible business practices when it comes to managing those pension assets for which we have the privilege of serving on trustee boards and/or where we are sole corporate trustee.

Practical, Professional and Prudential

We believe that it is not just because IORPs II is European law that the growing acknowledgement and understanding of the financial relevance of Environmental, Social and Governance (ESG) issues on future outcomes is really important. Rather, it is because it supports our proactive style, which is best summed up in our motto of >itals>Practical Professional Prudential>itals> trusteeship. This should be the guiding theme to all of our futures.

TRUSTEE DECISIONS is the first professional trustee company to be a signatory to the United Nations (UN) Principles for Responsible Investment (PRI) which aims to incorporate ESG factors into investment decisions to better manage risk and generate sustainable, longterm returns and who supports the UN Sustainable Development Goals

During the recent Climate Action Week, these have been themes highlighted by Sustainable Nation Ireland of which we are a proud supporter. TRUSTEE DECISIONS is proud to be recognised as a truly independent trustee company who mandate our investment consultants and investment managers to have greater adoption of:

In Association with

• Policies and procedures integrated into investment processes
• ESG factor integration
• Active ownership practices in voting and engagement.

Why? Because, given globalisation and the current geopolitical happenings in relation to climate change, it is a key area of focus for us in supporting our mandates by those sponsors and trustees of pension funds for which we have the honour and privilege to work with and for.

Trustee Responsibilities

A point that I regularly stress is that being a trustee of a pension scheme is a significant responsibility, which requires expertise and industry-wide experience. Trustees are often faced with challenging decisions as they attempt to balance the interests of sponsoring employers and beneficiaries, while running their scheme in an ever-changing legislative environment.

Trustees are responsible for ensuring that their scheme is adequately funded and for investing vast sums of money. Therefore, it is vital that trustees are cognisant of regulatory requirements and investment markets while understanding how to balance risk with expected returns. Trustees need to mandate their advisors with clear, unambiguous objectives and ensure they operate unhindered by any conflict of interest.