The Taskforce on Pension Scheme Voting Implementation (TPSVI) has
set out its recommendations on how to strengthen the role of
those who manage people’s savings in a move which will see
significant strides towards safer, better and greener pension
schemes.
Chaired by Simon Howard, the former CEO of the UK Sustainable
Investment and Finance Association, the TPSVI was set up by
Minister for Pensions to assist with voting system issues. It will also
encourage the people who invest pension savings – such as asset
managers - to engage with their clients’ preferences about where
their money goes.
Currently, when pension schemes invest in pooled funds, they
surrender their rights to vote at the Annual General Meetings of
the companies they invest in.
And until now, the vast majority of asset managers, who are in
charge of these pooled funds, have not always been prepared to
engage with their clients’ voting preferences.
These votes could be on issues such as climate risk management,
diversity, or pay.
Minister for Pensions and Financial Inclusion said:
This is about giving pension savers a voice in how their
hard-earned savings are being looked after.
I see no reason why trustees shouldn’t be able to determine
their own high level policies – on areas such as climate risk
management, diversity, or pay – and find an asset manager to
implement it.
I congratulate the Taskforce for delivering a compelling and
well-argued report. I will study the findings closely and
respond at the earliest possible opportunity.
Chair of the Taskforce, Simon Howard, said:
Our recommendations will give asset owners – such as pension
schemes – a louder say in voting in pensions.
There are two principal goals. First; by boosting the owner’s
voice and influence over their agents we can ensure that the
whole system works to better guide investee companies.
Second; we will let the people paying into pensions know that
their views are being considered, boosting the support pensions
saving will receive. Both are necessary for better pension
outcomes.
Taskforce member and Head of Pension Investments at Scottish
Widows, Maria Nazarova-Doyle, said:
It is incredibly important for asset owners like us to have a
voice when it comes to voting in pooled funds. A lot of our
customers invest in these and our stewardship responsibilities
cover all types of investments we make for them.
Having voting guidelines or an expression of wish in place with
managers allows asset owners to have an impact and ensure that
their sustainability preferences are taken into account when
asset managers undertake voting and engagement activities.
Taskforce member and Association of Member Nominated Trustees,
Janice Turner, said:
We are grateful to the Minister for Pensions for setting up
this taskforce, which has worked hard over the past few months
to assist pension scheme trustees to attain power over the
stewardship of their assets.
We welcome the call on asset managers to offer an expression of
wish to investors and we will be urging pension trustees to
take advantage of this.
We know that one taskforce cannot solve all the issues at a
stroke, and so we welcome the recommendation that if the
financial services industry does not respond adequately to
trustees attempting to fulfil their stewardship
responsibilities that action will be taken to change the law.
There are three main recommendations that have been put forward
by the Taskforce which look to align greater stewardship and
voting policies and help set a path towards more transparency,
and investment in line with savers’ interests.
The three main recommendations that have been put forward by the
Taskforce are:
- that pension scheme trustees should either set a voting
policy of their own, or explicitly accept responsibility for
those policies exercised on their behalf by their asset managers
- all asset managers are to offer asset owners the opportunity
to set an “expression of wish” as to how votes are exercised on
their behalf, regardless of how they invest
The Financial Conduct Authority should:
