Pension Scheme Governance

September 21st, 2021 by James Goudie KC

The Taskforce on Pension Scheme Voting Implementation has set out its Recommendations to the DWP on voting system issues and the respective roles of pension trustees and asset managers and communication between them. Currently, when pension schemes invest in pooled funds, they surrender their rights to vote at the AGMs of the companies they invest in. The asset managers in charge of these pooled funds are not always prepared to engage with their clients’ voting preferences, on issues such as climate risk management, diversity, and pay.

The 3 main Recommendations are that (1) trustees should either set a voting policy of their own or explicitly accept responsibility for those policies exercised by their asset managers; (2) all asset managers are to offer asset owners the opportunity to set an “expression of wish” as to how votes are exercised; and (3) the FCA should provide clarifications and set expectations, especially as to transparency.

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