TPT Retirement Solutions, a workplace pension scheme providing services to over 2,600 employers and 425,000 members in the UK, has published its Climate Action Plan, which includes interim targets for reaching net zero by 2050, or sooner.

TPT has committed to reducing the carbon intensity of its investment portfolio by at least 25% by 2025, aligning with the Intergovernmental Panel on Climate Change (IPCC) decarbonisation trajectory for the 1.5°C scenario.

In the longer term, TPT is commiting to halving portfolio emissions by 2030 to ensure it achieves net zero emissions across scopes 1, 2 and 3 by 2050. Furthermore, by 2030 TPT is commiting to seeking positive change from 90% of financed emissions operating in high carbon intensive sectors and rapidly increasing investments towards business activities driving the abatement of greenhouse gases.

The plan is part of TPT’s strategy to become net zero by 2050. In June 2021 TPT made a net zero commitment through the Paris Aligned Investment Initiative (PAII).

TPT has adopted the PAII’s Net Zero Investment Framework (NZIF) as a way of unlocking investment opportunities and scaling up flows of investment necessary to participate in a successful transition to a low carbon economy.

The plan encompasses listed equities, corporate fixed income, sovereign bonds and real estate; TPT will incorporate other asset classes once data and credible net zero assessment methodologies become available.

Cliff Speed, chief investment officer of TPT Retirement Solutions, said: ”Businesses today are expected to operate – and invest – in a climate-ambitious way. For us, this means taking an approach to managing our investment risks and opportunities on behalf of our members in line with our fiduciary duty.”

Recruitment challenges leave large employers at risk

Nearly one in three (30%) large employers, representing over 3,000 UK businesses, have reported challenges when recruiting staff with specialist pensions management skills and expertise, according to research conducted by Ross Trustees, which asked over 500 senior executives of businesses employing more than 250 people their approach to pension scheme management.

The results also showed that more than one in four (27%) large employers are planning to reallocate responsibility for pensions management internally as they struggle to recruit specialised resources.

Reallocating oversight of corporate pension schemes to non-specialists runs the risk of pensions management receiving less attention at a time when the complexity of the pensions landscape is increasing.

2022 has seen a number of new regulations, including the reformed Single Code of Practice and Taskforce on Climate-Related Disclosure (TCFD) reporting requirements.

Maintaining pace with The Pensions Regulator’s efforts to better protect workplace pensions means pensions managers increasingly need specialist skills and knowledge.

Despite the pension skills gap, Ross Trustees’ research shows two in three (66%) of large businesses surveyed have not considered bringing in external support when their current pensions manager leaves the business. Yet less than a third (29%) felt they had the necessary in-house skills to reallocate these responsibilities internally, potentially putting them at risk of a skills gap should complex scenarios arise.

Geoff McKenzie, trustee director at Ross Trustees, said: “In-house pensions managers are a crucial but often overlooked role within a company. With a role often spanning financial, legal and HR, the skills of a professional pensions manager are in short supply.

“This is especially worrying given the progressively complex pensions landscape. Pensions are headline news at the moment and the increasing regulatory burden placed on scheme governance means it is difficult for the role of a pensions manager to be performed by non-specialist alongside another day job.”

He added that external pension services firms offer the ideal way to address this skills gap, either for the long term or for a short-term project where pensions issues feature.

”With in-house pensions managers in short supply, external advisory services offer a cost-effective way of ensuring all regulatory requirements are met and offer businesses extra capacity to deal with any unexpected events,” he said.

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