PADA should not be held to UN rules

The trade body said it had opposed Pension Bill amendments to make PADA adhere to the rules because it should not be treated differently to other investors.

IMA spokeswoman Mona Patel told PP: "We have no problem with the board developing its own policies on environmental, social and governance issues. But it should do so in the same way as other large institutional investors.

"No other UK pension fund is subject to a special statutory requirement. A board of trustees must be free to operate on an independent basis with a primary duty of care to the scheme members."

The IMA also explained why it supported other amendments to the Bill – which said that the contribution limits should be set so as to ensure that personal accounts maintained their objective of focusing on the key target group.

It also said economies of scale would eventually allow personal accounts to reach its target charge of 0.3pc.

Patel said: "IMA believes that over time, substantial economies of scale will allow the scheme to reach its target of 0.3pc.

However, in the short term, the scheme faces a combination of initial set-up costs and higher administration costs as a proportion of total assets under management than will be seen in later years."