Fiduciary Duty

Q: The Pension Fund manager claims that fiduciary duty requires them to maximise returns and ignore ethical considerations. Is this the case?
A: No, this is a misinterpretation of the law. Pension fund trustees have a fiduciary duty to invest “in the best interests of members and beneficiaries” but the phrase ‘duty to maximise return’ is absent from any UK statute or case law. Pension trustees have discretionary powers; provided they have taken advice and are able to explain and justify their decision-making process can make decisions based on ethical and human rights considerations (Martin v City of Edinburgh, 1995).