Two-thirds of asset managers unable to provide pension schemes with voting information

Just one third (33 per cent) of asset managers were able to provide pension scheme trustees with details of how they had used their influence in voting as investors, according to Dalriada Trustees.

Its research, which it conducted in collaboration with service partner Minerva Analytics, found that 28 per cent of asset managers responded with no information, while 40 per cent said there was no information to report.

Asset managers were found to be similarly lacking when it came to providing data on their engagement with investee companies, with under a quarter (23 per cent) able to provide detailed information on engagement that they undertook.

A further 19 per cent were able to provide partial information, while 42 per cent of managers provided no information on engagement and 16 per cent said that there was no information to report.

Pensions Minister, Guy Opperman, described fund managers being unable or unwilling to respond to "reasonable requests" from schemes for voting information as "totally unacceptable".

He added: "Pension fund trustees need this information to fulfil their statutory and fiduciary duties. Asset managers need to step up, use their votes and report efficiently. I will be closely monitoring progress.”

Dalriada pointed out that trustees of defined benefit, defined contribution and hybrid schemes are required by law to create an annual Implementation Statement, outlining how their policies on exercising rights, including voting rights, and engagement with their investments have been undertaken.

With factors such as environmental, social and governance (ESG) investment more prevalent for members than ever, Dalriada stated that the examination of voting rights has become “increasingly important” in holding companies to account when seeking to meet objectives.

Dalriada Trustees director, David Fogarty, commented: “As trustees, we need to be able to show members what action we are taking in terms of voting and engagement on the assets we govern on their behalf.

“Yet, we are in a position where we are receiving insufficient information from the asset management community. We are seeing managers marketing funds for their ESG credentials, but they are failing to provide clear evidence of the actions being taken; clearly, this needs to change.”

Minerva Analytics managing director, asset steward solutions, David Crum, added: “The newly introduced requirement for trustees to create Implementation Statements is an incredibly important legal obligation, helping scheme members understand what stewardship actions have been taken on their investments by their scheme’s asset managers.

“At a time when many trustees and scheme members alike are worried about important issues such as climate change, it’s incredibly disappointing that the majority of asset managers appear to subscribe to the view that they cannot explain their policies, approaches and actions to their ultimate employers.”

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