UK pensions industry aims to have more say over assets under management

Retirement expert Carolyn Saunders of Pinsent Masons, the law firm behind Out-Law, said the report’s findings mean there will, in many cases, be a “gap” between what members of the retirement plan might want or expect from their investments and what administrators are able to achieve.

“The report highlights the growing influence of voting on the way businesses are run, while illustrating the difficulties most programs face in implementing their voting preferences,” she said. “This difference between what can be expected of trustees and what they can realistically achieve creates risks for trustees to manage.”

“The findings of the report should lead directors to verify that their governance around voting is as strong as it can be under all circumstances. Meanwhile, trustees can help the industry self-regulate by creating demand for it, ”she said.

The report recommends the introduction of a requirement for pension plans that choose not to define their own voting policy, to explicitly accept responsibility for the voting policies that asset managers implement on their behalf. This would be done through the Plan’s Statement of Investment Principles (SIP), which should set out the relevant policies of the asset managers on at least three topics that the Trustees believe are most important to the best interests of the members. The performance of the actual vote against policy on these topics would then be reported to members through the annual program implementation statement.

Asset managers should provide mutual fund investors, including pension plan administrators, the ability to make an “expression of wishes” about the fund, at no additional cost beyond the marginal cost of setting up. of individual politics. Asset managers and commercial organizations should also be committed to responding to all reasonable requests from clients regarding their voting and management activity.