Explore answers to commonly asked questions about pensions.
Curious? Your questions answered
A legal obligation of one party (a fiduciary) to act in the best interests of another. Fiduciaries are people or legal entities that are entrusted with the care of money or property on behalf of others. They include pension scheme trustees.
Integrated risk management is an approach used by defined benefit (DB) pension scheme trustees to identify, manage and monitor the wide range of risks (relating to investment, funding and covenant) which might impact the chances of meeting their scheme’s overall objectives.
NEST is the name for the personal accounts scheme established as part of the reforms of the UK pensions system under the Pensions Act 2008. It is run by the NEST Corporation, a public body accountable to Parliament via the Secretary of State for Work and Pensions. From October 2012 onwards, the government required employers to introduce auto-enrolment, under which most employees joined a workplace pension scheme unless they actively opted out of it. NEST is the default pension scheme for those employees whose employer decided not to offer an appropriate alternative arrangement.
Salary sacrifice describes a process where an employee agrees to forego or ‘sacrifice’ part of their salary in return for their employer making additional pension contributions on their behalf. The lower salary means a lower NI bill for both employer and employee.
Stewardship is defined in the UK Stewardship Code 2026 as “the responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries .”
This is the UK’s main measure of inflation which is calculated in line with international statistical standards. It is used for a wide range of purposes. These include its use as the measure to assess how the Bank of England is performing against its Government-stipulated 2% pa inflation target, as well as to increase state, public sector and statutory minimum pensions, along with some private sector pensions.
The new DB funding regime requires schemes to set a clear long‑term funding objective. An actuarial valuation is a good time for trustees and sponsors to consider their long-term objectives and overall strategy. For most schemes, given current financial market conditions, the new regime is unlikely to lead to a material increase in contributions.
The outlook for schemes seeking to insure in 2026 is positive – well-prepared and well-advised schemes will be able to achieve attractive pricing and benefit from innovation in key areas such as member experience.
Operating between mid-2019 and January 2021, PCRIG provided nonmandatory industry-wide guidance for UK pension scheme trustees on climate-related risks and aligning their scheme with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The Statement of Strategy is a key document submitted to TPR explaining the outcome of a scheme’s actuarial valuation. It includes narrative disclosures and a number of key trustee judgements, not just valuation numbers.
A holistic approach to measuring a company’s performance on environmental, social, and economic issues. The triple bottom line approach to management focuses not just on the economic value (profit) they add, but also on the environmental and societal value they add or detract.
This consists of a set of principles and provisions whose purpose is to facilitate effective management of listed companies with the aim of delivering long-term corporate success.
