Tough choices before, after divestment
Whether to divest from sensitive or controversial investments such as firearms can be a difficult call for fiduciaries, and making it doesn't put an end to the tough choices.
In the final part of a column series exploring a new risk management framework, 'risk 2.0', WTW global head of portfolio strategy Jeff Chee outlines what investment professionals of the future need to understand about the commonalities of risk events and the resulting benefits of an interconnected risk mindset.
Whether to divest from sensitive or controversial investments such as firearms can be a difficult call for fiduciaries, and making it doesn't put an end to the tough choices.
The defined-contribution system needs to switch its focus from accumulation to income. This means breaking away from traditional approaches – something most fiduciaries lack the courage to do.
Choice is considered a good thing. But in the auto-enrolment market, offering options for defined-contribution pension schemes can end up adding no value and increasing the cost to members.
The German Association of Institutional Investors (bii) was established in May to improve sharing of ideas across the sector and help establish proper governance safeguards.
Rory Murphy, chair of the Merchant Navy Officers Pension Fund, recounts the scheme's journey to delegating investment decisions and says being a good trustee is all about steering the ship.
Corporate failings and their impact on UK pension schemes are damaging the reputations of lay trustees, but they remain critical assets for pension boards, professor Robin Ellison argues.
Opinion