“Pension trustees must put financial returns before political ideology”
The National Union of Mineworkers pension scheme had five trustee representatives who refused to approve an investment plan that included overseas investments and investments in oil and gas companies that competed with coal. They argued these investments were contrary to the union's interests and members' employment prospects in the coal industry.
Whether pension fund trustees can refuse investments on political or social grounds rather than purely financial considerations, and what constitutes the proper exercise of fiduciary duties by pension trustees.
Trustees must exercise their powers in the best financial interests of beneficiaries as a whole. They cannot refuse beneficial investments on political, social or ethical grounds unless those considerations affect the financial merits of the investment.
This case established the fundamental principle that pension fund trustees' primary duty is financial, creating the legal framework for modern pension fund investment strategies. It remains the leading authority on trustees' fiduciary duties in investment decisions.
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OSCOLA Citation
Cowan v Scargill [1985] Ch 270 (Ch)
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