Sustainable Income at Retirement and UK Pension Fund Investment Oversight: a Practice Perspective

Abstract

Using practice theorizing, this paper sheds more fresh light into pension fund investment oversight and how trustees make strategic investment decisions in the complex institutional context. Using the insights from 22 in-depth interviews of pension fund trustees and pensions experts, we reveal that pension fund governance has been ‘ritualised’ in embedded and self-perpetuating practices. Specifically, the process of pension fund investment is dominated by a variety of contextual and internal constraints that often lead to a loss of value within pension fund investments, which is not in the long-term best interests of pension fund savers. Theoretically, our study raises important questions about the appearance rather than substance of governance and the principal role of pension fund trustees as non-executives in this process. We highlight the conflicting intersections around trustees as socially legitimate, trustworthy, independent social actors, as well as the challenges of working across social processes and structures in the effort to achieve fairer and more sustainable financial institutions. This has significant implications for policy and practice.