Given the billions of pounds tied up in private and public pension schemes in the UK, some – including the government – have suggested that pension schemes should invest in UK infrastructure as a means of stimulating economic growth. But the key question is: do pension schemes have an obligation to invest or act in ways that will help the macro-economy? Writing for Pensions Week, David Norgrove, Chair of PensionsFirst and Long Acre Life, argues that they do not. In terms of investment, he concludes that pension schemes have stringent legal duties to ensure that their assets are used to provide benefits for their members in accordance with the terms of the trust deed, case law and statute. Trustees should invest in infrastructure only if the expected risk and return are attractive. The macro-economy should anyway benefit if that condition is met, but that gain should not weigh in the decision.
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