Pension Schemes Bill – Government acts to clarify trustee investment duties

Ahead of the Lords’ Report stage on the Pension Schemes Bill which is scheduled to start on 16 March 2026, the long-awaited Government amendment to the Pension Schemes Bill to facilitate the statutory guidance on certain investment matters is now available.

The amendment requires the Secretary of State to issue guidance explaining aspects of the law, which could include the meaning of “financially material considerations” (including “environmental, social and governance considerations”) and “best interests of members”. The first guidance must be issued within 12 months of this part of the soon to be Act coming into force. The amendment specifies that trustees and fund managers to whom discretion has been delegated must have regard to the guidance.

Commenting on this development, David Everett, Research partner at LCP commented: “The Government clearly wants to move this topic along at pace. We already knew that there will be a full consultation on the draft guidance later in the Spring. It now seems that it may be published in final form by around this time next year, if not sooner”.

Sapna Patel, Principal in the Investment team at LCP added: “We welcome guidance on how trustees could take into account financially material considerations and the best interests of members. We hope that when we see this guidance it will provide trustees with more clarity and reassurance on possible actions available to them in an area that has been interpreted in different ways.”