Consider sustainability in bulk annuities, TPR tells trustees
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The Pensions Regulator said defined benefit trustees that are looking at an insurance solution should take sustainability into account as part of their due diligence.
TPR made the statement as Accounting for Sustainability, the charity set up by King Charles III, published a sustainability survey earlier this week. Signatories to its Sustainability Principles charter, created a year ago, will be using the survey to assess bulk annuity providers’ credentials.
TPR’s climate and sustainability lead Mark Hill has now also urged trustees to consider the climate resilience of a scheme’s pension investments when considering a buyout or buy-in.
“Where schemes are considering an insurance solution, we encourage trustees to take sustainability into account during their due diligence,” Hill said.
He added that the A4S charter for the bulk annuity process “provides helpful guidance”.
The comments show that sustainability might play a bigger role for TPR going forward. Hill wrote in 2023 that “a more forward-looking approach including transition planning will be needed”.
Last year, he said “trustees would do well to familiarise themselves” with the UK Transition Plan Taskforce, Taskforce for Nature-related Financial Disclosures and Taskforce for Social Factors, and “trustees should ensure their advisers have the appropriate skills and expertise so that they can make well informed decisions and put together effective transition plans”.
