Many of you will be busy beavering away, finalising your SIPs, readying implementation statements, and potentially creating new websites to be compliant by 1 October. This year’s changes follow the 2019 additions to the SIP, and the additional DC reporting via the Chair’s statement for trust-based DC schemes.

Each change is well intended and brings a greater level of accountability to trustees and their advisers. The availability of the SIP on a public website also brings more information, more easily, into the hands of the members (though the SIP has always been available on request for members, how often is it actually requested?).

However, how often do we stop and ask ourselves: who is the SIP for, and what is its purpose? Is it a compliance document or could it be a tool for engagement or even for change?

Compliance

The SIP is required under section 35 of the Pensions Act 1995 and I’ll guess that many SIPs have been in place for the last 20+ years with a layering of changes upon the original document. With legislation dictating the majority of the content, there is a tendency for the SIP to be seen as a compliance document, with less free rein for trustees over content. It is also a unique document in terms of it being a trustee-owned document, but in all cases requiring consultation with the employer, as well as advice to be taken from a suitably qualified professional. This technical nature has, in the past, no doubt restricted many lay trustees from being very liberal in terms of requiring more from their advisers by insisting upon a more engaging tone, or from getting too involved in overhauling the SIP themselves.

We operate in quite a different world today from even ten years ago, and we should be looking to raise the bar.

Engaging members

To my mind, the making of any document easily available on a public website focuses the minds (of trustees, employers, advisers) to ensure not just that the document is accurate, but also that it is understandable and readable. Prompted by the new requirements, some schemes will have undergone some fundamental re-thinking about the level of information that is shared with the scheme membership via the SIP. If we are honest with ourselves, however, for the vast majority, there has probably not been enough attention placed on how understandable the SIP is to a non-pensions expert, in terms of content, tone and language.

We, as pensions specialists, sometimes bemoan the lack of member engagement, but we don’t always help ourselves with providing some well-worn pieces of member literature. Things are improving though. While newsletters have typically always been reasonably engaging, my experience is that this is increasingly the case with summary funding statement information and annual benefit statements.

Purpose

The SIP is a tool for trustees to set out their investment policies, and for members to hold the trustees to account. It is not uniquely for members, but members certainly are one of the key end users. The new implementation statements, although potentially painful – as we go through the

process of creating them for the first time – should play a part in bringing to life the policies set out in the SIP. Rather than see the new requirements as a burden, can we challenge ourselves to view them as tools for progress?

Influencing for change

Many in the industry are excited by the opportunity to help drive change through stronger ESG policies. Money talks, and pension schemes have the power to influence corporate behaviours, through greater scrutiny of ESG policies and adherence to those policies. Our implementation statements will help to hold us to account. They may even prompt change.

On a separate strand, more information being publicly available is welcome. We should be striving to demystify pensions wherever we can, and access to readily available information helps with this. There is no magic overnight formula that can make pensions comprehensible to the average person on the street, but that is no excuse for not trying. While the SIP is not a document typically used for communicating with members (and nor is it likely to perform this role in the future), it will be on public websites, thereby increasing the number of reads it gets, and it should be accessible to members in terms of understanding.

So, as we move through the next 12 months, as we get used to implementation statements, and when we next look again at our SIPs, let’s do so with a fresh pair of eyes, and challenge ourselves to create a more engaging document.