This paper demonstrates what a social investment fund that is fit for investment by pension funds on behalf of UK savers could look like.
It has been written to provide helpful insights for investment managers, auto-enrolment providers and corporate employers in considering how they may approach this new product. It follows and complements an earlier paper, Good Pensions: Introducing social pension funds to the UK (SMF, BSC, 2015) that focused on why social pension funds are needed by the UK, the key barriers and how they can be overcome.
This paper aims to address some of the technical questions about how a social pension fund in the UK could work in practice. In particular, it finds that:
- Many elements of the French solidarity investment fund model can be applied to the development of a UK DC social pensions product.
- Further investigation is needed about the potential investable assets, relevant social investment strategies and new approaches to impact reporting and communications to design the fund.
- Investment managers, the social investment community and pension providers are needed to play important roles in establishing the UK’s first social investment fund for UK pensions.