Regulatory
In accordance with Schedule 19 of the Finance Act 2016, we set out below the tax strategy of Matheson & Co., Limited. ("the Company"). We believe that this strategy constitutes good corporate practice in the area of UK tax management and tax transparency, while balancing the interests of our stakeholders.
Overall Commitment
The Company will comply with its tax obligations which include making all appropriate returns covering all areas of UK taxes and ensuring the correct amounts of UK taxes are made by the due dates.
Working with the HMRC
The Company will maintain an open and transparent relationship with HMRC.
Tax Risk Management
When interpretation of the law is uncertain, the Company will seek to discuss the issue with HMRC at the time or refer to it when tax returns are filed. External advice will also be sought on matters of uncertainty or where there is no relevant specialist knowledge or experience in-house.
The Company operates a risk-based system of controls, processes and training in order to manage tax risks and minimise instances of error. The Company has a low tolerance for tax uncertainty.
Approach to Tax Planning
The Company adopts a prudent and low risk approach in tax planning. It will only utilise tax planning measures and opportunities for obtaining tax efficiencies where these comply with tax legislation, and when such tax planning is aligned with the commercial and economic activities of the Company. The Company will not use artificial structures that are intended for tax avoidance without bona fide business purpose, have no commercial substance or do not meet the generally understood intention of UK or international law.
The Company has a zero-tolerance policy towards tax evasion, any deliberate concealment of taxable income and benefits, or facilitating others in undertaking such activities.
Corporate Governance
The finance director manages the Company's tax function and consults with the tax team of its global parent company. The finance director ensures that the Company adopts the appropriate tax accounting treatment and reporting standards. The Board has ultimate responsibility for the Company's tax policies and ensuring its principles and approach are adhered to.
The Company follows the wider Jardine Group's Group Policy Manual and Code of Conduct to which all employees are required to subscribe and held to the highest standard.
The above document has been approved by the Board of Directors on behalf of the Company and applies for the year to 31 December 2019 and subsequent periods. The Company's tax strategy (which will be reviewed at least annually) will remain in effect until any amendments are approved by the Board of Directors.
December 2023
Matheson & Co Ltd
Website Privacy Policy
We are committed to protecting the privacy, confidentiality and security of the personal information we hold by complying with the requirements of Hong Kong's Personal Data (Privacy) Ordinance and Europe's General Data Protection Regulation. We are equally committed to ensuring that all our employees and agents uphold these obligations.
This privacy notice explains what information we gather about you, what we use that information for, the lawful basis on which that information is used and who we give that information to. It also sets out your rights in relation to your information and who you can contact for more information or queries.
Click on the links below to take you to the more detailed sections of this privacy notice:
- What this privacy notice covers and who it applies to
- What personal information we collect
- How we use personal information about you
- The legal grounds we use for processing personal information
- Who we disclose your personal information to
- How long we keep your personal information
- Protection of your personal information
- Your rights and how to contact us
- Changes to this privacy notice
What this privacy notice covers and who it applies to
We recognise the importance of your personal information and are committed to protecting your privacy and handling your personal information in an open, transparent and secure manner.
This privacy notice sets out how we will collect, handle, store, share and protect information about you when you:
(a) engage with us in relation to employment or experience opportunities at Jardines, including when you apply for a role with Jardines or participate in any assessment programme relating to such a role;
(b) apply for a Jardine Foundation Scholarship;
(c) visit and use our website, including, without limitation, subscribe to our email alerts;
(d) otherwise contact us, whether as part of media or investor communications, as part of our community and stakeholder outreach activities or otherwise.
This privacy notice applies to personal information collected on or through this website by Jardine Matheson Limited and various of its affiliates, including Matheson & Co Limited ("we", or "us", or "our"). When we refer to "our Website" or "this Website" in this privacy notice we mean (i) the specific webpages of Jardines.com that link to this notice, or (ii) any other webpage which explicitly refers to and links to this notice. In this privacy notice, we may refer to information about you as your "personal information". We may also sometimes collectively refer to handling, collecting, protecting and storing your personal information as "processing" such personal information.
We will refer to the activities mentioned in items (a) – (b) above collectively as the "Activities".
What personal information we collect
We typically collect or obtain your personal information because you give it to us (for example, when you engage with us in relation to the Activities or filling in a form on our Website), or because other people give that information to us (for example, recruiters or third party service providers that we use to help operate our business and run our Website), or because it is disclosed on publicly available sources such as business and employment oriented social networking services and job boards.
We also usually collect or obtain personal information from you because we observe or infer that information about you from the way you interact with us or others. For example, in order to improve your experience when you use this Website and ensure that it is functioning effectively, we (or our service providers) generally use cookies (small text files stored in a user's browser) and web beacons which may collect personal information.
The personal information that we collect or obtain typically includes: your name; age; date of birth; gender; picture; identification documents; immigration status; birth certificate; e-mail address (including your business, personal, and/or university e-mail addresses); home address; telephone number; other contact details; country of residence; family circumstances (for example, your marital status when you enter it in in a form on our Website, or it appears in any documentation you provide to us such as your marriage certificate); employment and education details (for example, your resume, scores on any assessments, evaluation records, interview recordings, remuneration details, the organisation you work for, your job title and/or the name of the university you attended, visa or work permit details); financial and tax-related information (for example, your income, assets and tax residency where such information appears in any documentation you provide to us); lifestyle and social circumstances (for example, where we would like to invite you to an event that may be of interest to you); postings on any blogs, forums, wikis and any other social media applications and services that we provide; IP address; browser and device type; language; access times and duration; details of how you like to use our Website; details of how you like to interact with us and other similar information.
If you are a scholarship applicant or recipient of an award by the Jardine Foundation (the "Jardine Scholarship"), we may also collect or obtain: a photograph of you; details of your university and lodging fees (to meet such fees (either in full or in part) while you are a Jardine Scholar); education details (such as the details of your university course and your academic results); lifestyle and social circumstances (such as your extra-curricular activities and community involvement); travel-related information (to reimburse you for certain travel expenses while you are a Jardine Scholar), immigration status (to assist you with the cost of migrating to the UK as part of your Jardine Scholarship) and any other personal information in your application for a Jardine Scholarship.
In some cases, the personal information we collect may also include so called 'sensitive' or 'special categories' of personal information, such as details about your health (like any disabilities that you may have and any accommodations we may need to make for you in the workplace); sexual orientation (for example, if you provide us with details relating to your partner or spouse); ethnicity, race and religious beliefs (for example, for the purpose of equal opportunities monitoring in Jardines); and any criminal convictions you may have (for example, for the purpose of conducting background checks on you). Usually this is because you volunteer this information to us.
The types of personal information and special categories of personal information that we collect will also generally vary depending on the activities for which you engage with us, how you use our Website, and the information you provide to us (such as through a webform or the Jardine Scholarship application). In some rare circumstances, we also gather other special categories of personal information about you because you volunteer that information to us or we are required to gather that information because of legal or regulatory requirements imposed on us. If we are so required to gather sensitive personal information from you, we will indicate to you that the provision of this information is mandatory, and the consequences if we cannot collect this information.
In some cases, we will also collect personal information about you indirectly from third parties such as: (i) recruitment agencies that you use to apply to Jardines such as Randstad and Korn Ferry; (ii) background check providers; (iii) universities and colleges to which you have applied in relation to the Jardines Scholarship Programme (collectively, the "Relevant Colleges"); (iv) third party service providers that help us operate our business and run our Website (such as Investis Digital); and (v) publicly available sources such as business and employment oriented social networking services (such as LinkedIn, Facebook and YouTube) and jobs boards (such as jobsDB).
How we use personal information about you
Use of personal information for the Activities
We will use your personal information in connection with the Activities. In particular, we will use your personal information to:
- undertake recruitment activities, such as determining the suitability of your qualifications, checking for any existing or potential conflicts of interest or any other restrictions which may otherwise restrict or prevent employment with Jardines;
- assist us in obtaining services from or managing external service providers (e.g. recruitment agencies);
- manage our HR records and update our employee database;
- where relevant, manage and make available personal information within the Jardine Matheson Group;
- operate and promote the Jardine Scholarship programme, including:
- provide you with information on the Jardine Foundation activities;
- manage and progress your application to, and participation in, the Jardine Scholarship programme;
- keep the Scholars' Directory up-to-date;
- provide opportunities to you and other Jardine Scholars to further relationships and networking between Jardine Scholars and provide Jardine Scholars with the opportunity to further their academic and professional development;
- to update Relevant Colleges about your application to, and participation in, the Jardine Scholarship programme and in return receive updates from them about your progression at the Relevant Colleges; and
- otherwise correspond and manage our relationship with you.
Use of personal information for other activities that form part of the operation of our business
We generally also use your personal information for the purposes or, in connection with, other activities that form part of the operation of our business. In general, these activities are:
- satisfaction of applicable legal or regulatory requirements;
- responding to requests from, and other communications with, competent public or judicial authorities;
- financial accounting, invoicing and risk analysis purposes;
- prudent operational management (including credit and risk management, insurance, audit, training and similar administrative purposes);
- prudent IT management (including management of our IT resources, infrastructure and business continuity);
- business development purposes;
- obtaining services from our professional advisors, such as lawyers, accountants and consultants;
- considering, and entering into, any transaction involving part or all of the business or assets of the Jardine Matheson Group;
- protecting our rights and those of our customers and clients;
- meeting our corporate and social responsibilities; and
- to otherwise correspond with you, whether as part of media or investor communications (including sending you email alerts), as part of our community and stakeholder outreach activities or otherwise.
Use of personal information collected via our Website
We generally use personal information collected via this Website:
- to manage and improve any services provided via our Website;
- to manage and improve our Website (including drawing up statistics on the usage of our Website);
- to tailor content of our Website to provide you with a more personalised experience and draw your attention to information about products and services that may be of interest to you;
- to manage and respond to any request you submit through our Website; and
- to help us learn more about you, the products and services that you receive, and other products and services that you might be interested in receiving.
The legal grounds we use for processing personal information
We generally use your personal information for the purposes outlined above because: (a) it is necessary for our legitimate interest and does not unduly affect your interests or fundamental rights and freedoms (see below); (b) it is necessary for legal and/or regulatory obligations or requests that we are subject to, such as keeping records for tax purposes or providing information to a public body or law enforcement agency; (c) it is necessary to perform contractual obligations that we owe to you or to take pre-contractual steps at your request; (d) it is necessary for the performance of a tasks carried out in the public interest, such as assisting with diversity in the workplace; or (e) in some cases, we have obtained your prior consent.
Examples of the 'legitimate interests' referred to above are:
- to benefit from cost-effective services (e.g. we may opt to use certain IT platforms offered by service providers);
- to determine whether a candidate or potential candidate's skills and experience are suitable for a role within Jardines, and determine whether or not to make an offer of employment with Jardines;
- at the appropriate stage in the recruitment process (i.e. as part of making an offer of employment to you), to verify the accuracy of information (including remuneration details) you have provided to us as part of your application, including through background screening and recruitment agencies;
- to effectively operate and promote the Jardine Scholarship programme and the Scholars' Directory
- to prevent fraud or criminal activity, misuses of our website as well as the security of our IT systems, architecture and networks and security of Jardines premises;
- to exercise our rights under Articles 16 and 17 of the Charter of Fundamental Rights in the EU, including our freedom to conduct a business and right to property; and
- to meet our corporate and social responsibility objectives.
To the extent that we process any sensitive personal information relating to you for any of the purposes outlined above, we will do so because either: (1) you have given us your explicit consent to process that information; (2) the processing is necessary for reasons of substantial public interest on the basis of applicable law (for example where we are required by law or regulatory requirements to process that information in order to ensure that we meet our anti-money laundering obligations); (3) the processing is necessary to carry out our obligations under employment, social security or social protection law; (4) the processing is necessary for the establishment, exercise or defence of legal claims; or (5) you have made the information manifestly public.
The legal grounds for processing sensitive personal information outlined above at (1) to (5) appear at Articles 9(2)(a), 9(2)(g), 9(2)(b), 9(2)(f) and 9(2)(e) of the EU's General Data Protection Regulation respectively.
Where we are legally required to obtain your explicit consent to provide you with certain marketing materials, we will only provide you with such marketing materials where we have obtained such consent from you.
If you do not want to continue receiving any marketing materials from us, you can click on the unsubscribe function in the communication or e-mail [email protected].
Who we disclose your personal information to
In connection with one or more of the purposes outlined in the "How we use personal information about you" section above, we generally disclose details about you to: other members of the Jardine Matheson Group; professional advisors and third parties that provide services to us (such as IT systems providers, hosting providers such as Investis Digital, payroll providers, IT support providers, consultants (including lawyers and accountants) and public relationship advisers ; competent authorities (including any national and/or international regulatory or enforcement body or courts or other form of tribunal) and in the case of Jardine Scholarship, Relevant Colleges and other Jardine Scholars. Where we disclose detail about you to other members of the Jardine Matheson Group they will either act as another controller under this notice or will only process personal information on behalf and upon request of the controller.
Please note that some of the recipients of your personal information referenced above will be based in countries other than your country of residence whose laws may or may not provide the same level of data protection as your country. These countries typically include Hong Kong, Singapore and the UK. Your personal information may also be disclosed to other jurisdictions where we have business operations, such as the People's Republic of China and other countries in South East Asia including Vietnam, Thailand, Malaysia, and Indonesia.
In such cases, we will ensure that there are adequate safeguards in place to protect your personal information that comply with our legal obligations. If you are an EEA resident, in order to ensure this level of protection for your personal information, we typically use a data transfer agreement with the recipient based on standard contractual clauses approved by the European Commission. A copy of these clauses is available here: https://commission.europa.eu/publications/standard-contractual-clauses-international-transfers_en.
Further details of the transfers of your personal information outside of your country of residence and the adequate safeguards used by the Jardine Matheson Group in respect of such transfers (including copies of relevant agreements) are available from us by contacting [email protected]. You can also use this e-mail address to request further information about the entities that comprise the Jardine Matheson Group and the countries in which they operate.
How long we keep your personal information
We will hold your personal information on our systems for as long as is necessary to fulfil the purpose for which it was collected or to comply with legal, regulatory or internal policy requirements. In general, although there may be some limited exceptions:
(a) information relating to unsuccessful candidates is kept for up to twelve months after the date on which the post applied for is filled;
(b) information relating to potential candidates for roles within Jardines is kept for up to six months from the date of our last communication with such candidates;
(c) information relating to successful candidates is dealt with by our employee privacy notice that will be provided to you upon joining Jardines;
(d) information relating to unsuccessful applicants to the Jardine Scholarship programme is kept for two years following their application;
(e) information relating to past Scholars is deleted from the Scholars' Directory within one month following an indication received from the Scholars that they do not want their details included on the Scholars' Directory (after which such details will be archived);
(f) cookies relating to our website (subject to your preferences) will be kept for up to 24 months, after which it will be archived for a further seven years before it is permanently removed from our systems; or
(g) information about your correspondence with us, including through online forms or email correspondence, is kept for seven years, after which it will be archived for a further seven years before it is permanently removed from our systems.
Protection of your personal information
We use a range of physical, electronic and managerial measures to ensure that we keep your personal information secure, accurate and up to date. These measures include:
- education and training to relevant staff to ensure they are aware of our privacy obligations when handling personal information;
- administrative and technical controls to restrict access to personal information on a 'need to know' basis;
- technological security measures, including fire walls, encryption and anti-virus software; and
- physical security measures, such as staff security passes to access our premises.
Although we use appropriate security measures once we have received your personal information, the transmission of data over the internet (including by e-mail) is never completely secure. We endeavour to protect personal information, but we cannot guarantee the security of data transmitted to us or by us.
Your rights and how to contact us
You have various rights in relation to your personal information. In particular, you have a right to:
- object to the processing or your personal information;
- request a copy of personal information we hold about you;
- ask that we update the personal information we hold about you, or correct such personal information that you think is incorrect or incomplete;
- ask that we delete personal information that we hold about you, or restrict the way in which we use such personal information; and
- withdraw consent to our processing of your personal information (to the extent such processing is based on consent).
To exercise any of your rights, or if you have any other questions about our use of your personal information, please e-mail us at [email protected]. You may also use these contact details if you wish to make a complaint to us relating to your privacy.
If you are unhappy with the way we handled your personal information or any privacy query or request you have raised with us, you also have a right to complain to a data protection regulator in the place where you live or work, or in the place where you think an issue in relation to your personal information has arisen. A list of national data protection regulators in the European Union can be found here: http://ec.europa.eu/justice/article-29/structure/data-protection-authorities/index_en.htm.
Changes to this privacy notice
This notice was last updated on 31st May 2018.
It may be subject to amendments. Any future changes or additions to the processing of personal information as described in this notice affecting you will be communicated to you through an appropriate channel, depending on how we normally communicate with you.
Matheson Group Pension Plan
(June 2024)
Introduction
1. This document is the Statement of Investment Principles (the "SIP") made by the Trustees of the Matheson Group Pension Plan (the "Plan") in accordance with the requirements of Section 35 of the Pensions Act 1995 (as amended by the Pensions Act 2004 and regulations made under it). The Plan is a defined benefit (DB) plan which is closed to future accrual since 2009.
2. The Trustees will review this SIP at least every three years to coincide with the triennial Actuarial Valuation or other actuarial advice relating to the statutory funding requirements. Furthermore, the Trustees will review this SIP without delay after any significant change in investment policy. Before finalising this SIP, the Trustees took advice from a suitably qualified firm and consulted Matheson & Co Ltd (the "Company"). The ultimate power and responsibility for deciding investment policy, however, lies solely with the Trustees.
Investment objectives
3. The Trustees have the following investment objectives:
- The acquisition of suitable assets of appropriate liquidity which will generate an overall level of return, together with any future contributions from the Company, that is sufficient to meet the liabilities as and when they fall due, and to ensure the security, quality and profitability of the portfolio as a whole;
- To limit the risk of the assets failing to meet the liabilities, both over the long-term and on a shorter-term basis; and
- To minimise the long-term costs of the Plan by maximising the return on the assets whilst having regard to the objective shown under the points above.
4. While this is articulated as an agreed objective for the Plan to be fully funded on the Technical Provisions basis, the Trustee's ultimate goal is to be fully funded on a more prudent low-risk liability measure and subsequently on a solvency basis.
Investment strategy
5.The Trustees have agreed a long-term investment strategy that targets an expected return of Gilts +1.5% pa. Based on analysis as at 30 April June 2024, this level of return was expected to achieve full-funding on a low-risk liability measure (i.e., liability cashflows discounted at Gilts +0.5% pa) by 2026.
6. The Trustees have determined their investment strategy after considering the Plan's liability profile and requirements of the current Statutory Funding Objective, their own appetite for risk, the views of the Company on investment strategy, the Company's appetite for risk, and the strength of the Company's covenant as well as reflecting the Trustees' desire to diversify risk exposures and to manage their investments effectively. The Trustees received advice to determine the investment strategy for the Plan.
7. The investment strategy makes use of three key types of investments:
- a range of low-risk instruments that provide a broad match to changes in liability values and cashflows to pay pensions (including high quality corporate bonds and bulk annuity policies as appropriate);
- a portfolio of secure income assets; and
- a diversified portfolio of return-seeking assets (including equities, listed real assets, diversifying strategies, hedge funds, private markets, alternative credit and downside protection).
8. The Trustees have appointed an investment manager to manage the Plan's assets on a discretionary basis and to provide investment advisory services to the Trustees (the "Fiduciary Manager"). The balance within and between these investments will be determined from time to-time at the discretion of the Fiduciary Manager, with the objective of maximising the probability of achieving the Plan's investment strategy set by the Trustees, subject to maintaining risk within a limit agreed by the Trustees. The Fiduciary Manager's discretion is subject to guidelines set by the Trustees in the Fiduciary Management Agreement between the parties as amended from time to time (the "FMA"). In exercising investment discretion, the Fiduciary Manager is required to act in accordance with its obligations in the FMA, including the guidelines and any investment restrictions set out therein, and in so doing is expected to give effect so far as reasonably practicable to the principles contained in this SIP. This ensures appropriate incentivisation and alignment of decision-making with the Trustees' overall objectives, strategy and policies.
9. The implied initial Gilts +1.5% pa target portfolio to be managed by the Fiduciary Manager is set out below:
Asset Class |
Initial Target |
Liability Matching | 67%* |
Secure Income | 11% |
Diversified Return Seeking | 22% |
*The liability matching allocation uses leverage to deliver a target liability hedge ratio of 96% (as a percentage of assets). The Fiduciary Manager is required under its guidelines to maintain this ratio between 80% and 100%.
10. The Trustees may also consider opportunities to purchase bulk annuity policies as appropriate within the context of the Plan's investment strategy. Any bulk annuity policies fall outside the remit of the Fiduciary Manager's discretion.
11. The Plan will hold assets in cash and other money market instruments from time to time as may be deemed appropriate.
12. The Trustees will monitor the liability profile of the Plan and will regularly review, in conjunction with the Fiduciary Manager and the Scheme Actuary, the appropriateness of its investment strategy.
13. The expected return of all the Plan's investments will be monitored regularly and will be directly related to the Plan's investment objective.
14. The Trustees' policy is that there will be sufficient investments in liquid or readily realisable assets to meet cash flow requirements in foreseeable circumstances so that the realisation of assets will not disrupt the allocation of the Plan's overall investments, where possible. The Trustees have set explicit liquidity provisions in the Fiduciary Manager's guidelines as follows:
Time Frame |
% of total plan assets |
% realisable within 2 weeks | Minimum 55 |
% realisable within 1 month |
Minimum 55 |
% realisable within 1 year | Minimum 80 |
Investment managers
15. The Trustees have delegated investment selection, de-selection and the ongoing management of relationships with investment managers to the Fiduciary Manager within guidelines set by the Trustees in the FMA. Investments are made by the Fiduciary Manager on behalf of and in the name of the Trustees.
16. The Trustees consider the Fiduciary Manager's performance in carrying out these responsibilities as part of its ongoing oversight of the Fiduciary Manager. The Trustees expect the Fiduciary Manager to ensure that the Plan's investment portfolio, in aggregate, is consistent with the policies set out in this SIP, in particular those required under regulation 2(3)(b) of the Occupational Pension Schemes (Investment) Regulations (2005). The Trustees expects the Fiduciary Manager to check that the investment objectives and guidelines of any pooled vehicle are consistent with the Trustees' policies contained in the SIP.
17. WTW has been appointed as Fiduciary Manager since 2022. In accordance with the Financial Services and Markets Act 2000, the selection of specific investments will be delegated to investment managers. The investment managers will provide the skill and expertise necessary to manage the investments of the Plan competently. The duration of the arrangements with investment managers will be determined on an individual basis considering the nature of the relevant investment mandate. In most cases, managers are appointed with the expectation of a long-term relationship but with an ability to terminate where considered appropriate. However, there may be occasions when managers are put in place for a short period or a fixed period, depending on the nature of the investment strategy.
18. The Trustees and Fiduciary Manager are not involved in the investment manager's day-to-day method of operation and do not directly seek to influence attainment of their performance targets. However, the Fiduciary Manager may provide investment recommendations to the investment managers of certain pooled funds appointed where it considers it appropriate. The Fiduciary Manager will maintain processes to ensure that performance and risk are assessed on a regular basis against measurable objectives for each investment manager, consistent with the achievement of the Plan's long term objectives.
19. The Trustees expect the Fiduciary Manager to select investment managers with an expectation of a long-term partnership with the Trustees. which encourages active ownership of the Plan's assets. When assessing an investment manager's performance, the Trustees expect the Fiduciary Manager to focus on longer-term outcomes, commensurate with the Trustees' position as a long term investor. Consistent with this view, the Trustees do not expect that the Fiduciary Manager would terminate an investment based purely on short-term performance but recognises that an investment may be terminated within a short timeframe due to other factors such as a significant change in the relevant manager's business structure or investment team. The Trustees adopt the same long term focus as part of its ongoing oversight of the Fiduciary Manager.
20. For most of the Plan's investments, the Trustees expect the Fiduciary Manager to select investment managers with a medium to long time horizon, consistent with that of the Plan. In particular areas such as equity and credit, the Trustees expect the Fiduciary Manager to work with investment managers who will use their engagement activity to drive improved performance over medium to long term periods within the wider context of long-term sustainable investment. The Trustees note that the Fiduciary Manager may invest in certain strategies where such engagement is not deemed appropriate or possible, due to the nature of the strategy and/or the investment time horizon underlying decision making. The Trustees expect that the appropriateness of the Plan's allocation to such mandates is determined in the context of the Plan's overall objectives.
21. The Trustees recognise that an investment's long-term financial success is influenced by a range of financially material factors including environmental, social and governance ("ESG") issues.
22. Consequently, the Trustees (through the selection of the Fiduciary Manager with its approach to ESG issues as set out in the relevant paragraphs below) seek to be an active long-term investor. The Trustees' focus is explicitly on financially material factors. The Trustees· policy at this time is not to take into account non-financial matters in the selection, retention, and realisation of investments.
23. When considering their policy in relation to stewardship including engagement and voting, the Trustees expect investment managers to address broad ESG considerations taking into account the nature of the assets held under the relevant investment mandate, but has Identified climate and human and labour rights as key areas of focus for the Trustees. The Trustees assess that ESG risks, and in particular climate change, pose a financial risk to the Plan and that focussing on these issues is ultimately consistent with the Trustees' fiduciary duties and the financial security of their members. Whilst the Trustees' policy is to delegate several stewardship activities to the Fiduciary Manager and their investment managers, the Trustees recognise that the responsibility for these activities remains with the Trustees. The Trustees incorporate an assessment of how well the Fiduciary Manager and investment managers exercise these responsibilities as part of their overall assessment of their performance.
24. The Fiduciary Manager has a dedicated sustainable investment resource and a network of subject matter experts. The consideration of ESG issues is fully embedded in the investment manager selection and portfollo management process, with oversight undertaken on a periodic basis. The Trustees expect the Fiduciary Manager to assess the alignment of each investment manager's approach to sustainable investment (including engagement) with its own before making an investment on the Plan's behalf. The Trustees expect the Fiduciary Manager to engage with the Plan's investment managers where the Fiduciary Manager considers this appropriate regarding their approach to stewardship with respect to relevant matters including capital structure of investee companies, actual and potential conflicts, other stakeholders and ESG impact of underlying holdings. In addition, the Trustees expect the Fiduciary Manager to review the investment managers' approach to sustainable investment (including engagement) on a periodic basis and engage with the investment managers to encourage further alignment as appropriate.
25. The Fiduciary Manager considers a range of sustainable investment factors, such as, but not limited to, those arising from ESG considerations, including climate change, in the context of a broader risk management framework. The degree to which these factors are relevant to any given strategy is a function of time horizon, investment style, philosophy and particular exposures which the Fiduciary Manager takes into account in the assessment.
26. The Fiduciary Manager encourages and expects the Plan's investment managers to sign up to local or other applicable stewardship codes, in keeping with good practice, subject to the extent of materiality for certain asset classes. The Fiduciary Manager itself is a signatory to the Principles for Responsible Investment and the UK Stewardship Code and is actively involved in external collaborations and initiatives.
27. The Trustees' policy is to delegate responsibility for the exercising of rights (including voting rights) attaching to the Plan's investments to their investment managers. The Fiduciary Manager assesses the voting policies of the investment managers that it appoints on the Trustees' behalf, for consistency with the Trustees' policies and objectives, as appropriate. The Fiduciary Manager has also appointed EOS at Federated Hermes to undertake public policy engagement and company-level engagement on its behalf. EOS at Federated Hermes also assists the Trustees' equity managers with voting recommendations.
28. The Trustees expect the Fiduciary Manager to consider the fee structures of investment managers and the alignment of interests created by these fee structures as part of its investment decision making process, both at the initial selection of an investment manager and on an ongoing basis. Investment managers are generally paid an ad valorem fee, in line with normal market practice, for a given scope of services which includes consideration of long-term factors and engagement. The Trustees expect the Fiduciary Manager to review and report on the costs incurred in managing the Plan's assets regularly, which includes the costs associated with portfolio turnover. In assessing the appropriateness of the portfolio turnover costs at an individual investment manager level, the Trustees expects the Fiduciary Manager to have regard to the actual portfolio turnover and how this compares with the expected turnover range for that mandate.
Other matters
29. The Plan is a Registered Pension Scheme for the purposes of the Finance Act 2004.
30. The Trustees may hold insurance policies or other assets that are earmarked for the benefit of certain members, for instance immediate annuity policies purchased to match all or part of the Plan liabilities, or benefits secured by Additional Voluntary Contributions, Individual Transfers in or Special Payments.
31. The Trustees recognise a number of risks involved in the investment of the Plan's assets, and, where applicable, monitors these risks in conjunction with the Fiduciary Manager.
Deficit risk
- is measured through a qualitative and quantitative assessment of the expected development of the liabilities relative to the current and alternative investment policies
- is managed through assessing the progress of the actual growth of the liabilities relative to the selected investment policy.
Solvency risk and mismatch risk:
- are measured through a qualitative and quantitative assessment of the expected development of the Plan's funding level.
- are managed through the development of a portfolio consistent with delivering the Plan's investment objective.
Investment Manager risk:
- is measured by the expected deviation of the return relative to the benchmark set.
- is managed by considering when to employ active versus passive management given prospective net of fees returns, consideration of the appropriate amount of the Plan's assets to allocate to any active portfolios and by monitoring the actual deviation of returns relative to the benchmark and factors supporting the investment managers' investment process.
Liquidity risk:
- is measured by the level of cash flow required by the Plan over a specified period.
- is managed by the Plan's administrators assessing the level of cash held in order to limit the impact of the cash flow requirements on the investment policy and through holding assets of appropriate liquidity.
Credit risk:
- this is the risk associated with the inability of a borrower to repay, in full or part the monies which it owes to a creditor.
- the Plan invests in pooled investment vehicles and is therefore directly exposed to credit risk in relation to the instruments it holds in the pooled investment vehicles and is indirectly exposed to credit risks arising on the financial instruments held by the pooled investment vehicles.
- direct credit risk arising from pooled investment vehicles is mitigated by the underlying assets of the pooled arrangements being ring-fences from the investment manager, the regulatory environments in which the investment managers operate and the diversification of investments amongst a number of pooled arrangements.
- indirect credit risk arises in relation to underlying bond investments held in the pooled funds. This risk is mitigated by investing in diversified portfolios.
Currency risk:
- is measured by the level of exposure to non-Sterling denominated assets.
- is managed by the implementation of a currency hedging programme (carried out within some of the pooled investment vehicles) which reduces the impact of exchange rate movements on the Plan's asset value.
Interest rate and inflation risk:
- are measured by comparing the likely movement in the Plan's liabilities and assets due to movements in inflation and interest rates.
- are managed by holding a portfolio of matching assets (physical bonds and/or derivatives via pooled vehicles) that enable the Plan's assets to broadly match movements in the value of the liabilities due to inflation and interest rates. The construction, ongoing monitoring and consideration of risks (such as derivatives risk) of this portfolio is undertaken by the Fiduciary Manager, with oversight by the Trustees.
Political risk:
- is measured by the level of concentration of any one market leading to the risk of an adverse Influence on Investment values arising from political Intervention.
- is managed by regular reviews of the actual investments and through the level of country diversification within the portfolio.
Sponsor risk:
- is measured by the level of ability and degree of willingness of the Company to support the continuation of the Plan and to make good any current or future deficit.
- is managed by assessing the interaction between the Plan and the Company's business, as measured by a number of factors, including the creditworthiness of the Company and the size of the pension liability relative to the Company. Periodic updates on the covenant are provided to the Trustees by senior staff of the Company.
Legislative risk:
- this is the risk that legislative changes will require action from the Trustees so as to comply with any such changes in legislation.
- the Trustees acknowledge that this risk is unavoidable but will seek to address any required changes so as to comply with changes in legislation.
32. The measures do not render the investment policy free of risk. Rather, the measures endeavour to balance the need for risk control and the need to allow the investment managers sufficient flexibility to manage the assets in such a way as to achieve the required performance targets. The risks detailed above will be monitored on a regular basis.
Adopted by the Trustees of the Matheson Group Pension Plan in June 2024, replacing the previous SIP dated July 2023.
Matheson & Co., Limited
Matheson Group Pension Plan ('the Plan')
Annual Implementation Statement ('the Statement')
Plan year ending 30 June 2023
Introduction
This document is the Annual Implementation Statement ("the statement") prepared by the Trustees of the Matheson Group Pension Plan ("the Plan") covering the Plan year {"the year") to 30 June 2023.
The purpose of this statement is to set out:
- Set out how, and the extent to which, in the opinion of the trustees, the Plan's engagement policy (required under regulation 23c of the Occupational Pension Schemes Investment Regulations 2005) has been followed during the year;
- Describe the voting behaviour by, or on behalf of, trustees (including the most significant votes cast by trustees or on their behalf) during the year and state any use of services of a proxy voter during that year.
The Plan makes use of a wide range of investments; therefore, the principles and policies in the SIP are intended to be applied in aggregate and proportionately, focussing on areas of maximum impact.
In order to ensure that investment policies set out in the SIP are undertaken only by persons or organisations with the skills, information and resources necessary to take them effectively, the Trustees delegate some responsibilities. In particular, the Trustees have appointed a Fiduciary Manager, Towers Watson Limited, to manage the Plan's assets on a discretionary basis. The Fiduciary Manager's discretion is subject to guidelines and restrictions set by the Trustees. So far as is practicable, the Fiduciary Manager considers and seeks to give effect to the policies and principles set out in the Trustees' SIP.
A copy of this implementation statement has been made available on the following website: https://www.matheson.co.uk/regulatory?tab=-pension-plan-annual-implementation-statement
Review of and changes to the SIP
The SIP was comprehensively updated in September 2022 where it was agreed by the Trustees to replace the previous SIP dated July 2020. For the purpose of assessing how the Plan's SIP has been followed, the remainder of this statement specifically focusses on the SIP agreed in September 2022 which was formally in place for the majority of the Plan year. Post year end, a review of the SIP took place to reflect changes to the investment strategy, and an updated SIP dated July 2023 was agreed by the Trustees.
Adherence to the SIP - voting and engagement
As set out above, the Trustees have delegated responsibility to the Fiduciary Manager to implement the Trustees' agreed investment strategy, including making certain decisions about investments (such as asset allocation and manager selection/deselection) in compliance with Sections 34 and 36 of the Pensions Act.
The Fiduciary Manager is therefore responsible for managing the sustainability of the portfolio and how Environmental, Social and Governance ("ESG") factors are allowed for in the portfolio.
The Trustees' view is that ESG factors can have a significant impact on investment returns, particularly over the long-term. As a result, the Trustees believe that the incorporation of ESG factors is in the best long-term financial interests of its members. The Trustees have appointed a Fiduciary Manager who shares this view and has fully embedded the consideration of ESG factors in its processes. The Trustees incorporate an assessment of the Fiduciary Manager's performance in this area as part of its overall assessment of the Fiduciary Manager's performance.
The Fiduciary Manager's process for appointing and monitoring managers explicitly and formally includes an assessment of a manager's approach to SI (recognising that the degree to which these factors are relevant to any given strategy is a function of time horizon, investment style, philosophy and exposures). Where ESG factors are considered to be particularly influential to outcomes, the Fiduciary Manager engages with investment managers to improve their processes.
The policies and processes described above have impacted the Plan's investments in numerous ways. Through its investment in the Partners Fund, the Plan also manages risk and considered ESG integration in its investment processes and strategies - with portfolio examples including:
- UK forestry - The strategy will acquire unused agricultural land in the north of England and Scotland to plant trees and grow forests, capturing carbon in the process. The intention is to hold the forests that have been created for three to five years until the trees have established themselves after which there are various possible exit routes.
- Japanese Solar Panels - Invests (through a third party manager) in Japanese renewable energy with some exposure to other solar energy. Invests in late stage construction and development of solar, biomass and battery storage in Japan.
The Partners Fund has Article 8 Sustainable Finance Disclosure Regulation designation. This covers a Fund which promotes, among other characteristics, environmental or social characteristics, or a combination of those characteristics, provided that the companies in which the investments are made follow good governance practices, amongst other requirements.
The Investment Manager intends for these Sub-Funds to achieve at least a 50% reduction in greenhouse gases by 2030 in its portfolio and continue beyond that time to further reduce greenhouse gases from the portfolio with an aim of net zero emissions by 2050. Progress is measured using multiple climate metrics.
Industry wide/ public policy engagement
The Fiduciary Manager has partnered with EOS at Federated Hermes (EOS) for a number of years to enhance its stewardship activities. One element of this partnership is undertaking public policy engagement on behalf of its clients (including the Trustees). This public policy and market best practice engagement is done with legislators, regulators, industry bodies and other standard-setters to shape capital markets and the environment in which companies and their investors operate, a key element of which is risk related to climate change. The Fiduciary Manager represents client policies/sentiment to EOS via the Client Advisory Council, of which its Head of Stewardship currently chairs. It applies EOS' services, from public policy engagement to corporate voting and engagement, to several of its funds. Some highlights from EOS' activities over 2022 include:
- Engagements with over 1,138 companies on a total of 4,250 issues and objectives
- 33 rsponses to consultations or proactive equivalents and 75 discussions with relevant regulators and stakeholders
- Voting recommendations in relation to over 134,188 resolutions at 13,814 meetings, including 24,461 being against management
- Active participation in a number of stewardship initiatives including Climate Action 100+, Principles for Responsible Investment (PRI), and UN Guiding Principles Reporting Framework
The Fiduciary Manager is also engaged in a number of industry wide initiatives and collaborative engagements including:
- Becoming a signatory to the 2020 UK Stewardship Code in the first wave, and subsequently retained that status
- Co-founding the Net Zero Investment Consultants Initiative with eleven other investment consultants in 2021, with a commitment across its global Investment business
- Joining the Net Zero Asset Managers Initiative in 2021, committing 100% of its discretionary assets
- Being a signatory of the Principles for Responsible Investment (PRI) and active member of their Stewardship Advisory Committee
- Being a member of and contributor to the Institutional Investors Group on Climate Change (IIGCC), Asian Investors Group on Climate Change (AIGCC), and Australasian Investors Group on Climate Change (IGCC)
- Founding the Coalition for Climate Resilient Investment (with the World Economic Forum)
- Co-founding the Investment Consultants Sustainability Working Group
- Continuing to lead collaboration through the Thinking Ahead Institute and Willis Research Network
- Being a founding member of The Diversity Project
- Being an official supporter of the Transition Pathway Initiative
Company level engagement and rights attached to investments (including voting)
The Trustees have delegated responsibility for the selection, retention and realisation of investments to the Fiduciary Manager, and in turn to the Plan's investment managers. The day-to-day integration of ESG considerations and stewardship activities (including consideration of all relevant matters, voting and engagement) are delegated to the Plan's investment managers.
Through the engagement undertaken by the Fiduciary Manager, the Trustees expect investment managers to sign up to local Stewardship Codes and to act as responsible stewards of capital as applicable to their mandates. The Fiduciary Manager considers the investment managers' policies and activities in relation to Environmental, Social and Governance (ESG) and stewardship both at the appointment of a new manager and on an ongoing basis. The Fiduciary Manager engages with managers to improve their practices and may terminate a manager's appointment if they fail to demonstrate an acceptable level of practice in these areas. However, no managers were terminated on these grounds during the Year.
The Plan is invested across a diverse range of asset classes which carry different ownership rights, for example fixed income whereby these holdings do not have voting rights attached. Therefore, voting information was only requested from the Plan's equity managers as here there is a right to vote as an ultimate owner of a stock. Responses received are provided in the table below. Where managers provided multiple examples of "significant votes", three of those deemed most significant by the Trustees have been shown below. The Trustees have endeavoured to select "significant" votes which align with the Trustees' recently identified priorities for voting and engagement (as per the SIP dated July 2023) - human and labour rights, and climate - where the data has allowed.
At the year end, the Plan was invested in an in-house multi-asset growth fund managed by the Fiduciary Manager which has an allocation to equity holdings in underlying pooled funds:
- Towers Watson Investment Management (TWIM) Partners Fund
The table below sets out a summary of the voting within the Towers Watson Investment Management ("TWIM") fund. This data represents activity over the period 1 July 2022 to 30 June 2023.
Manager and strategy | Portfolio structure | Voting activity |
---|---|---|
Towers Watson Partners Fund | Fund of funds | Number of meetings at which the manager was eligible to vote: 1,859 Number of resolutions on which manager was eligible to vote: 25,672 Percentage of eligible votes cast: 93% Percentage of votes with management: 87% Percentageof votes against management: 13% Percentage of votes abstained from: 0% Of the meetings the manager was eligible to attend, the percentage where the manager voted at least once against management: 62% Of the resolutions where the manager voted, the percentage where the manager voted contrary to the recommendation of the proxy adviser: 4% |
In addition, the Partners Fund has reported on the most significant votes cast within the underlying funds managed on behalf of the Plan, including reasons from the underlying managers why the votes identified were considered significant, the rationale for the voting decision and the outcome of the vote:
Most significant votes cast |
Coverage in portfolio |
---|---|
Company: TotalEnergies SE Resolution: Approve the Company's Sustainable Development and Energy Transition Plan How the manager voted:For Rationale for the voting decision: Upon consideration of TotalEnergies' stated targets and the proposed shareholder resolution the manager assessed the current targets as reasonable in the context of a global energy transition. Rationale for being considered a significant vote: Thematic priority, as Climate Change, which includes engaging with companies on the quality of their disclosures; the credibility of their emission reduction plans; and the progress thereof, is one of the manager's key identified engagement priorities.' Outcome of Vote: Pass |
Towers Watson Partners Fund (0.2%) |
Company: Apple Inc. Resolution: Report on Median Gender/Racial Pay Gap How the manager voted: For Rationale for the voting decision: The manager believes that the shareholder proposal promotes better management of ESG opportunities and risks. Rationale for being considered a significant vote: Vote against management, large holding in portfolio. Outcome of the vote: Failed |
Towers Watson Partners Fund (0.1%) |
Company: Berkshire Hathaway Resolution:Report If and How Company Will Measure, Disclose and Reduce GHG Emissions How the manager voted: For Rationale for the voting decision: The manager believes that the shareholder proposal promotes better management of ESG opportunities and risks. Rationale for being considered a significant vote: Vote against management, large holding in portfolio. Outcome of the vote: Failed |
Towers Watson Partners Fund (0.03%) |
Conclusion
The Trustees consider that all SIP policies and principles were adhered to during the year.
Appendix 1: Manager voting policies
As TWIM manages Fund of Funds, the voting rights for the holdings are the responsibility of the underlying managers. TWIM expects all of the underlying managers who hold equities over a reasonable timeframe to vote all shares they hold. TWIM have appointed EOS at Federated Hermes (EOS) to provide voting recommendations to enhance engagement and achieve responsible ownership. EOS also carries out public policy engagement and advocacy on behalf of all TWIM clients. In addition, EOS is expanding the remit of engagement activity they perform on TWIM's behalf beyond public equity markets, which will enhance stewardship practices over time.
For the TW Partners Fund, the equity exposure comes from four main areas:
Our global equity portfolio where EOS provides voting recommendation to enhance engagement and help achieve responsible ownership. EOS's voting recommendations are informed by its extensive research and experience in the area of stewardship as well as its long-term engagement activities with companies. The underlying managers must provide an explanation and note their rationale when they choose to vote differently to the recommendation. The underlying managers in this portfolio use ISS's 'ProxyExchange' electronic voting platform to facilitate voting.
Our China equity manager uses Glass Lewis service where they have created a bespoke policy.
Our emerging markets equity managers use ISS, Glass Lewis, SES and Broadridge Proxy Edge platforms for information and to facilitate voting.
Our long-short equity managers use ISS to provide corporate research and to facilitate the voting process.