Voting taskforce takes on pension scheme governance

October 8, 2021

The Taskforce on Pension Scheme Voting Implementation (TPSVI) has published new recommendations to give pension savers a voice in how their savings are being looked after and encourages asset managers to engage with their clients.

The Taskforce, which is chaired by Simon Howard, former CEO of the UK Sustainable Investment and Finance Association, and Guy Opperman, the minister for pensions and financial inclusion, deals with voting system issues.

The current system prevents pension schemes that invest in pooled funds to vote at the annual general meetings of the firms they invest in.

“This is about giving pension savers a voice in how their hard-earned savings are being looked after,” said Opperman. “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.”

Maria Nazarova-Doyle, head of pension investments at Scottish Widows and Taskforce member, 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 considered when asset managers undertake voting and engagement activities.”

Sarah Wilson, CEO at Minerva Analytics, welcomed the announcement, adding: “We believe that this will make asset manager reporting considerably cheaper and more efficient for everyone.” Minerva has been widely acknowledged for providing the proxy voting expertise to make pooled fund voting possible in a collaboration with DWS.

Meanwhile, in the US, the Securities and Exchange Commission (SEC) has proposed a rule change to help investors scrutinise proxy voting by managers.

The amendments to the annual Form N-PX filing, which were outlined by the US regulator, included stipulations on how investment funds organise their annual proxy voting disclosures. If the rule changes were to go ahead, funds would also be required to label and categorise disclosures to help investors “identify votes of interest and compare voting records”.

These changes, much like the paradigm shift toward pooled fund voting seen by the TPSVI, each mark an important step in the progression of shareholder rights and greater pensions stewardship. The SEC’s proposals will be open for public consultation for 60 days.