Statement of investment principles

A statement of investment principles is a UK pension scheme’s governing investment document. Section 35 of the Pensions Act 1995 requires trustees to prepare and maintain one in writing. Schemes with fewer than 100 members are exempt.

Regulation 2 of the Occupational Pension Schemes (Investment) Regulations 2005 sets its contents. The statement must cover the kinds of investments to be held, the balance between them, risks, expected return and realisation. It must also address financially material considerations, non-financial matters, stewardship and arrangements with asset managers.

Trustees review it at least every three years and without delay after a significant change in investment policy. Before preparing or revising it, they take written advice and consult the employer. Numeric ranges often sit in investment management agreements, so monitoring reads both (what the 2005 Regulations require).