Trustees are not progressive, they regard their fiduciary responsibility to do the best for their members, but even so, it is surprising that the FCA’s trustee’s have so little interest in investing in the UK.

The Financial Conduct Authority’s defined benefit pension scheme has just 4 per cent of its equity portfolio invested in UK stocks, far lower than its private sector peers, despite urging others to invest more at home. ]

The £556.9mn pension scheme, which is closed to new members, is mostly invested in debt securities but only £1.8mn of its £45mn listed equity portfolio is allocated to the UK, according to its annual report.

That compares with an average allocation of about 25 per cent across private sector DB funds, according to research by the Pensions Policy Institute last year. Most private sector DB funds are also closed to new members.

The low allocation of the regulator’s pension scheme to UK stocks comes as the government and the FCA itself have been trying to encourage pension fund managers to invest more in their domestic market

The Bank of England’s DB pension scheme doesn’t bother with investing in growth stocks at all – let alone UK growth stocks, the ones we’re relying on to drag us out of the long slough of depression we’ve seen in this country,

There is no gain-saying the trustee who has eyes on certainty and if you are at the BOE or its regulator the FCA it appears to be certain pensions for staff and an uncertain future the people whose finances it is supposed to be protecting.

The financial watchdog also has a £1.57bn defined contribution scheme for its staff, where UK equity exposure is about 3 per cent of total assets. The UK stock market makes up about 3.5 per cent of global equities.

Earlier this year, FCA boss Nikhil Rathi told the Treasury committee:

“Australian and Canadian pension funds seem to find investments in the UK more attractive than our own pension funds, and their pensioners are getting the benefits of those returns.”

“We have to ask ourselves if that is really a sensible, long-term solution for our society,”

he added. The regulator’s scheme is run by a separate legal entity. Most of its trustees, who are advised by pensions consultants, are FCA employees.

No wonder we are having a consultation on trustees!  Pensions minister Torsten Bell said in May that the low allocation to UK assets — across all asset classes — by pension schemes was

“not in the interest of the country in the longer term” and the end goal was “well-functioning capital markets, both public and private”.

Thanks to Mary McDougall and  Ramsay Hodgson.