UK pension scheme names Sharia, ethical managers

UK pension scheme names Sharia, ethical managers

12 April 2011, Tuesday / REUTERS, LONDON: Available at:

Britain’s new national pension scheme for workers whose employers do not run their own plans has appointed HSBC and F&C to run the Islamic and ethical portfolios respectively.

The National Employment Savings Trust (NEST), expected to become Britain’s largest pension fund with up to 100 billion pounds ($164 billion) in total assets by 2030, will offer the two portfolios, among others, when it launches next year. Contributions of members choosing Islamic fund management will be paid into the HSBC Life Amanah Pension Fund, run by the banking group’s Islamic finance unit. Such investments would shun association with areas forbidden by Islam, such as alcohol, weapons, pornography, gambling and mainstream financial services because they charge interest, also seen as sinful.

The contributions of those who want to invest in a portfolio which takes into account issues such as employment practices, human rights and the environment, will be funnelled into F&C’s Stewardship International Fund. “There are positive focuses that align very well with what we know about our members; protecting human rights, good employment practices, positive impact on local communities,” Fawcett said, adding he expected the option to be reasonably popular. NEST will charge members, potentially millions of workers with no corporate pension, the same fee as the default option, which is expected to attract around 80 percent of inflows given most members were expected to shy away from making specific investment choices.

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