The Pensions Regulator has said trustees should communicate about the war in Ukraine. So what have schemes been telling their members? 

 

For some, the answer is ‘nothing’, but others have responded quickly, with communications focusing mainly on investment positions and sanctions. Just two schemes have highlighted cyber security, scams and the possibility of pensioners living in Ukraine or Russia.  

 

Some of the first schemes to say something about their reactions to the war in Ukraine were the TfL Pension Fund and the Universities Superannuation Scheme, but others schemes have since followed suit. 

 

 

The Mineworkers’ Pension Scheme said it is closely monitoring the unfolding crisis in Ukraine and reassuring members that its direct investments in Russia are “a very small proportion” of total assets. It noted that it is actively engaging with its asset managers “so that any remaining investments can be sold as soon as market conditions permit”, adding that is has also taken immediate action in relation to investments that are indirectly exposed to Russia. It highlighted that it will monitor the indirect effects of the crisis on investments – and that the scheme enjoys a government guarantee. 

 

Geoff Mellor, chief executive of Coal Pension Trustees Services, said the trustees have received a small number of questions from members about the potential impact of the current conflict on their pensions and about the trustees’ actions with regard to investment in Russia. 

“We concluded that it was appropriate to post something on the Scheme’s website,” he said. The trustees considered the regulator’s note for this, “primarily to check that we hadn’t missed some important aspect in our considerations”. 

 

A number of other schemes are also looking to exit their Russia positions. The M&S Pension Scheme, which holds less than 0.05% of its assets in Russia and Belarus, is “working closely with the relevant Investment Managers and seeking to remove these funds as soon as we are practically able”. 

 

Similarly, the trustees of defence firm Leonardo’s DC arrangement have asked managers to remove any remaining allocations “as far as possible”, although they noted that “it is difficult to remove all investments completely, not least because Russian markets are currently closed". The scheme held around 0.2% in Russian assets. 

 

 
Railpen, which manages the Railways Pension Scheme assets, said that it has “very little” direct exposure to Russian investments and that it plans to sell this “when sanctions allow”. The team manages a small number of investments in publicly traded Russian companies and has no investments in any Russian government assets; as of 1 March 2022, these investments totalled about £24m, or 0.07% of assets, it said. 
 
"As an immediate step, we froze all trading activity on the small number of investments that are in Russia. Because of the sanctions, we may not be able to sell these now, but we will sell them when we can. We believe this is the right thing to do at this time, and we will continue to review this position in the future,” Railpen told members.  
 
The manager also noted that cyber threats increased in the build-up to and since the start of the conflict, and that it has worked to strengthen processes and security measures further. 

 

Others have not committed to divesting. The pension trustees of construction firm Taylor Wimpey said current restrictions mean it may not be possible to completely remove Russian assets in the short term, and that the trustees would “continue to monitor the position” with their advisers. The scheme holds less than 0.05% in assets that are linked to Russia or Ukraine.  

 

It is perhaps the only scheme to mention the possibility of pensioners living in one of the affected countries, saying that it has reviewed its membership to understand if any pensioners are based in Russia, Ukraine or Belarus. 

“At this stage we are not aware that any pensioners are affected,” it said, but urged members to contact administrators if they have any concerns about the ongoing payment of their pension.

It also is largely alone in mentioning the heightened risk of scam activity as scammers seek to play on people’s fears during the conflict. 

 

 

The trustees of the £31bn HSBC Bank (UK) Pension Scheme, having taken investment and legal advice, said their “preferred policy position is that, at this time, the Scheme should not invest in Russian domiciled assets”.  

 

The scheme’s exposure to shares and bonds in Russia is around 0.01% of total assets, held in pooled funds. “The trustee is engaging with those managers to actively encourage those managers to reflect the trustee’s policy position,” the scheme said. “At a minimum they will have to comply with relevant sanctions and the trustee will be asking them to confirm that they are doing so.” 

 

It added that, aside from not making any new investments in Russian domiciled assets, the trustees expect managers to use their discretion as to whether to sell existing investments "bearing in mind that it may not be possible to sell at present”.