New body will address issues preventing asset managers from going with trustee voting positions.
A new Taskforce on Pension Scheme Voting Implementation has been launched by the UK government in response to concerns that asset managers of pooled pension funds are not voting in line with asset owner policies.
Pensions Minister Guy Opperman announced the new body on Tuesday in a speech to the Association of Member Nominated Trustees (AMNT), which recently flagged the issue in its ‘Bringing Shareholder Voting into the 21st Century’ report.
The group will investigate barriers preventing investors’ voting policies from being implemented in pension funds, as well as looking at ways to increase the number of asset managers who are “prepared to engage” with their client preferences.
“[Investors] get to choose the manager and the fund and with it the investment manager, but they don’t get to choose how to vote at annual general meetings for the companies’ shares they hold,” said Opperman.
The Taskforce will be independent to the Department for Work and Pensions (DWP) and will present potential regulatory and non-regulatory measures to ensure “convergence” of voting policy and execution with trustees’ policies and preferences, especially in pooled funds, Opperman added.
Simon Howard, former CEO of the UK Sustainable Investment and Finance Association, will chair the group, with Minerva Analytics CEO Sarah Wilson acting as vice-chair.
“The current situation, where trustees are disenfranchised as fund managers ignore their wishes and frequently take weak or contrary positions, cannot continue. It is not right, it is not fair and it is in conflict with the regulatory requirements placed upon trustees,” said Janice Turner, AMNT Co-Chair.
“The establishment of the taskforce is a huge step forward and I am proud that AMNT’s Red Line Voting Campaign helped to alert the minister to the problem,” Turner added. The Red Line Voting Campaign offers pension scheme trustees (and other asset owners) the opportunity to direct the voting of the UK-listed shares owned on behalf of their members.
The Taskforce group will also include representatives of the AMNT, with the rest of the membership to be announced in due course.
“I’m grateful to the AMNT for [its report], which sets out proposals for a new working group to examine the overly complex and archaic voting structure, under-investment in the stewardship function of fund manager, transparency of voting policies and outcomes, and scheme specific reporting requirements,” Opperman said.