Myners

The ten Myners’ principles and current level of trustee compliance are:

Principle	ABP Trustee response
Effective Decision Making Decisions should be taken only by persons or organisations with the skills, information, and resources necessary to make them effectively. Where trustees elect to take investment decisions, they must have sufficient expertise and appropriate training to be able to evaluate critically any advice they take. Trustees should ensure that they have sufficient in-house staff to support them in their investment responsibilities.Trustees should also be paid, unless there are specific reasons to the contrary. It is good practice for trustee boards to have an investment sub-committee to provide appropriate direction. Trustees should assess whether they have the right set of skills, both individually and collectively, and the right structures and processes in place to carry out their role effectively.They should draw up a forward-looking Business Plan. Where Defined Contribution section members are given a choice regarding investment issues, sufficient information should be given to them to allow an appropriate choice to be made.	The Trustee is partially compliant with this principle.The area of non-compliance is the payment of Trustees.The Trustee felt that the majority of Trustee Directors were paid by way of their employment.

Clear Objectives Defined Benefit sections The trustees should set out an overall investment objective for the Scheme that: -represents their best judgement of what is necessary to meet the Scheme’s liabilities, given their understanding of the contributions likely to be received from employer(s) and employees; and -takes account of their attitude to risk, specifically their willingness to accept underperformance due to market conditions, Objectives for the overall Scheme should not be expressed in terms which have no relationship to the Scheme’s liabilities, such as performance relative to other pension funds or to a market index. Defined Contribution section In selecting Defined Contribution funds to offer as options to Defined Contribution section members, trustees should: -consider the investment objectives, expected returns, risks and other relevant characteristics of each fund, so that they can publish their assessments of these characteristics for each selected fund; and -satisfy themselves that they have taken their members’ circumstances into account and that they are offering a wide enough range of options to satisfy the reasonable return and risk combinations appropriate for most members.	The Trustee considers that it is compliant with this principle.

Focus on Asset Allocation Defined Benefit sections Strategic asset allocation should receive a level of attention (and, where relevant, advisory or management fees) that fully reflects the contribution they can make towards achieving the Scheme’s investment objective. Decision-makers should consider a full range of investment opportunities, not excluding from consideration any major asset class, including private equity.Asset allocation should reflect the Scheme’s characteristics, not the average allocation of other schemes. Defined Contribution section Where a fund is offering a default option to members through a customised combination of funds, trustees should make sure that an investment objective is set for the option, including expected returns and risks.	The Trustee considers that it is compliant with this principle.

Expert Advice Contracts for actuarial services and investment advice should be opened to separate competition.The Scheme should be prepared to pay sufficient fees for each service to attract a broad range of potential providers.	The Trustee considers that it is compliant with this principle.

Explicit Mandates Defined Benefit sections Trustees should agree with both internal and external investment managers, an explicit written mandate providing agreement between trustees and managers on the following: -the setting of an objective, benchmark(s) and risk parameters that together with all the other mandates are coherent with the Scheme’s aggregate objective and risk tolerances -the manager’s approach in attempting to achieve the objective; and -clear timescale(s) for measurement and evaluation, so as to ensure that the mandate will not be terminated before the expiry of the evaluation timescale for underperformance alone Defined Contribution section Trustees should communicate to Defined Contributionmembers, for each fund offered by the scheme, the following: -the investment objective for the fund, its benchmark(s) and risk parameters; and -the manager’s approach in attempting to achieve the objective. These should also be discussed with the fund manager concerned, as should a clear timescale(s) of measurement and evaluation, with the understanding that the mandate will not be terminated before the expiry of the evaluation timescale for underperformance alone. The mandate and trust deed and rules should not exclude the use of any set of financial instruments without clear justification in the light of the specific circumstances of the scheme. Both Sections Trustees, or those to whom they delegate the task, should have a full understanding of transaction-related costs incurred, including commissions.They should understand all the options open to them in respect of these costs, and should have an active strategy – whether through direct financial incentives or otherwise – for ensuring that these costs are properly controlled without jeopardising the Scheme’s other objectives.Trustees should not without good reason permit soft commissions to be paid in respect of their fund’s transactions.	The Trustee considers that it is compliant with this principle.

Activism Trustees should comply with the Institutional Shareholders Committee statement of principles on the responsibilities of institutional shareholders and agents, and ensure that the principles are incorporated into fund managers’ mandates.In line with the principles, trustees should also ensure that managers have an explicit strategy, elucidating the circumstances in which they will intervene in a company; the approach they will use in doing so; and how they measure the effectiveness of this strategy.	The Trustee considers that it is compliant with this principle.

Appropriate benchmarks Trustees should: -explicitly consider, in consultation with their investment manager(s), whether the index benchmarks they have selected are appropriate; in particular, whether the construction of the index creates incentives to follow sub-optimal investment strategies -if setting limits on divergence from an index, ensure that they reflect the approximations involved in index construction and selection -consider explicitly for each asset class invested, whether active or passive management would be more appropriate given the efficiency, liquidity and level of transaction costs in the market concerned; and -whether they believe active management has the potential to achieve higher returns, set both targets and risk controls that reflect this, giving managers the freedom to pursue genuinely active strategies	The Trustee considers that it is compliant with this principle.

Performance Measurement Trustees should arrange for measurement of the performance of the Scheme.They should make formal assessment of their own procedures and decisions as trustees.They should also arrange for a formal assessment of performance and decision-making delegated to advisers and managers.	The Trustee considers that it is compliant with this principle.

Transparency Defined Benefit sections A strengthened Statement of Investment Principles should set out: -who is taking which decisions and why this structure has been selected -the scheme’s investment objective -the scheme’s planned asset allocation strategy, including projected investment returns on each asset class, and how the strategy has been arrived at -the mandates given to all advisers and managers; and -the nature of the fee structures in place for all advisers and managers, and why this set of structures has been selected Defined Contribution sections A strengthened Statement of Investment Principles should set out: -who is taking decision and why this structure has been selected -each fund option’s investment characteristics -the default fund option’s investment characteristics and why it has been selected -the agreements with all advisers and managers; and -the nature of the fee structures in place for all advisors and managers, and why this set of structures has been selected.	The Trustee considers that it is compliant with this principle

Regular Reporting Trustees should publish their Statement of Investment Principles (SIP) and the results of their monitoring of advisers and managers.They should send key information from these to members of these funds annually, including an explanation of why the fund has chosen to depart from any of these principles.	The Trustee is partially compliant in this area.The key information from the SIP has been published and the full SIP is available on the pensions web site.The results of the monitoring of advisers and managers has not been published as yet.