Pensions Minister urges investors to boost stewardship

December 10, 2021

UK asset managers should comply with new stewardship guidelines to give their clients greater influence over voting shares held in pooled funds, the country's pensions minister has said.

Guy Opperman, minister for pensions and financial inclusion, has written to 44 asset managers urging them to offer pooled fund investors the opportunity to set an ‘expression of wish’ regarding voting on the assets within the funds they invest in.

The letter was sent to leading asset managers including Baillie Gifford, Abrdn, Ninety-One, Schroders, Vanguard and Janus Henderson Group.

Opperman's letter cited the recommendations made by the Taskforce on Pension Scheme Voting Implementation (TPSVI) in October. Opperman is co-chair of the TPSVI, and Minerva CEO Sarah Wilson sits as Vice-Chair.

“I welcome this recommendation and see no reason why trustees should not be able to set an expression of wish if they want to do so,” the minister wrote.

He added that there was no regulatory barrier to trustees who wanted to issue an expression of wish to their asset managers regarding their voting preferences, and no breach of fund rules if a fund manager was to take the expression of wish into account when voting.

Opperman also warned asset managers who choose not to act on the stewardship recommendations.

“I am keen to monitor progress on this matter carefully, as the TPSVI recommended that, if adoption by managers is slow, then the issue should be referred to the Law Commission to propose structures that give owners the necessary rights,” said the minister.

“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.”

Separately, the Occupational Pensions Stewardship Council has also written to asset managers calling for better alignment on voting policies. The letter was co-signed by 17 asset owners including the Pension Protection Fund and NEST.