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30 April 2024
This Statement of Investment Principles ("SIP") Implementation Statement ("the Statement") has been prepared by the Trustee of the Altro Pension Scheme ("the Trustee") in relation to the Altro Pension Scheme ("the Scheme").
This Statement is required by the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 (as amended). The regulations state that the Statement must (amongst other matters):
Based on regulatory requirements, the Statement covers the period from 1st May 2023 to the end of the Scheme's financial year on 30th April 2024.
The Statement is split into three sections:
In the first quarter of 2024, the Trustee instructed Insight, the Scheme's LDI manager, to increase the inflation and interest rate hedge ratios in order to protect the Scheme's deficit, which had materially fallen in size. This was executed at the same time the Scheme's LDI Benchmark was updated to incorporate the results of the 2023 valuation.
During the Scheme year, the Trustee also selected a stewardship theme, climate change, with engagement behaviour related to this theme being reported in this Statement.
The Trustee is committed to reviewing the SIP on an annual basis. This review was undertaken in November 2023, where minor edits were made to reflect the new investment in the TwentyFour Corporate Bond fund and recent disinvestments. The Trustee is comfortable the statement remains an accurate reflection of the Trustee's policies and beliefs.
Direct engagement with underlying companies (as well as other relevant persons) of which the Trustee owns shares and debt is carried out by the Scheme's investment managers. Other than cash held within the Trustee bank account, the Scheme's assets are invested in pooled funds where the Trustee holds units in a fund rather than having any direct ownership rights over the underlying assets. As a result, the Trustee's investments are subject to the managers' stewardship activities and policies.
The Trustee's policy is to delegate responsibility for the engagement with relevant persons, which includes the exercising of rights (including any voting rights) attaching to investments, to the investment managers. Each investment manager is expected to exercise voting rights in accordance with their guidelines. The Trustee encourages its managers to engage with investee companies and promote adherence to best practice in corporate governance.
Periodically, the Trustee will either meet with the Scheme's managers directly or ask their investment advisor to provide a thorough review. Managers are expected to provide details on these activities and the Trustee's investment advisor will take this into account when monitoring and advising on the suitability of each manager.
The use of voting as a form of engagement is most relevant to the sections of the portfolio where physical equities are held, in which the Scheme does not currently hold investments. However, other forms of stewardship and engagement are considered to be of importance for all of the Scheme's investment managers.
All of the Scheme's investment managers are signatories to the UK Stewardship Code. The Trustee is comfortable that the Scheme's managers provide good quality and transparent reporting of their approach to stewardship. More information on how each of the Scheme's managers has followed the stewardship and engagement policies set out by the Trustee can be found in the appendix.
| Policy
|
Evidence of how the policy has been met
|
|---|---|
| Direct engagement with underlying companies (as well as other relevant persons) of which the Trustee owns shares and debt is carried out by the Scheme's investment managers.
|
The Scheme's managers have all outlined engagement activities for the shares and debt held by the Scheme. Examples can be found in the appendix.
|
| The Trustee expects its investment managers to practise good stewardship. This includes monitoring, engaging with issuers of debt or equity on relevant matters such as performance, strategy, risks, capital structure, conflicts of interest and environmental, social or governance considerations, and using voting rights to effect the best possible long-term outcomes.
|
All of the Scheme's investment managers are signatories to the UK Stewardship Code. The Scheme's managers have demonstrated their use of engagement, which is detailed in the appendix.
|
| The Trustee's policy is to delegate responsibility for the engagement with relevant persons, which includes the exercising of rights (including voting rights) attaching to investments to the investment managers. Each investment manager is expected to exercise voting rights in accordance with their guidelines. The Trustee encourages its managers to engage with investee companies and promote adherence to best practice in corporate governance. The Trustee monitors and discloses the voting records of its managers on an annual basis.
|
The Scheme does not currently invest in equities, so there is no voting behaviour to disclose.
Engagement is carried out by all of the Scheme's managers, and a summary of their engagement policies is set out in the appendix. |
| The Trustee's investment advisers assess the ability of the Scheme's investment managers in engaging with underlying companies in order to promote the long-term success of the investments, and report to the Trustee on an annual basis covering how the investment managers have acted in line with this policy.When selecting, monitoring and de-selecting asset managers, engagement is factored into the decision-making process to the appropriate level for the specific asset class in question.
|
The Scheme's return-seeking investment managers have provided examples of their stewardship approaches (detailed in the appendix).
The Scheme's investment consultant also factors stewardship into their manager recommendations. |
There are no voting statistics to report for the funds in which the Scheme invests, given no equities were held over the Scheme year.
The Trustee is comfortable that the voting and engagement policies have all been adequately followed over the Scheme year.
