The Russian invasion of Ukraine presents issues for pension scheme trustees to consider. Alongside clear implications regarding investments and the need to comply with sanctions, these may include questions about covenant, funding, cyber security and scam risks.
This briefing addresses the issues most likely to arise, some of which are also noted by the Pensions Regulator in its guidance.
- Sanctions
- Investment
- Covenant
- Funding
- Cyber security and scam risks
- Communicating with members
- How we can help
1. Sanctions
Breaching UK or international sanctions is a criminal offence which can result in criminal or civil penalties, so taking steps to ensure compliance with them should be an immediate priority. Note that additional sanctions have been implemented against Belarusian as well as Russian entities and individuals in response to the invasion. Some entities in Ukraine are also sanctioned (for example in occupied Crimea).
Trustees should check with (as applicable) their investment managers, custodians and fiduciary managers that they have proportionate controls in place to ensure compliance with government sanctions as regards their investments. FCA guidance sets out its expectations for such firms in this regard.
If any benefits are paid to accounts with banks based in the relevant locations, or even (however unlikely) to potentially sanctioned Russian or Belarusian individuals anywhere in the world, trustees should urgently check the implications of financial sanctions…
