UK schemes urged to act 'on the spirit' of law regarding voting disclosure
UK - Pension funds must act on the spirit rather than purely the letter of the law when it comes to matters of voter disclosure, a member of the UK House of Lords has insisted.
Referring to an amendment for the current Pensions Bill, which would mandate easy access to voting records, Lord German, co-chair of the Liberal Democrat party's parliamentary committee on Work & Pensions, said it was time for fund managers to "give their members meaningful information".
He stressed that the Stewardship Code valued disclosure of voting patterns by asset managers, but that asset owners must also play their part in ensuring effective stewardship.
German went on to argue: "If the purpose of stewardship is to ensure the assets of ultimate owners are safeguarded, there must be accountability to those ultimate owners on how its stewardship responsibilities are being exercised.
"Asset manager disclosure alone will not achieve this - pension funds also need to play their part."
Lord German insisted that a decade after Statements of Investment Principles (SIP) became mandatory for UK pension schemes, the time had come to go beyond "generic statements" that characterised them.
However, at a recent discussion at the National Association of Pension Funds' Investment Conference in Edinburgh, John Chilman, a trustee of the Railways Pension scheme, said SIPs, by becoming overly long, had become too inflexible.
He said the amendments would help "join the dots" between individuals who pay into pension funds and corporations who rely on them.
"As such, we've tried to cut down on a lot of detail within the SIP to allow some flexibility and to focus on the key issues," he said.
"Some of the bad press we got from our sponsors back in 2008 was we were not responding to the market environment."
However, Lord German said the proposed amendments - to be debated in the House of Lords this week and proposing clear and easy ways to access an asset manager's voting record - would not be a burden for schemes.
He said: "In many cases, the pension fund would only need to provide a link to their asset manager's disclosures on their websites."
Catherine Howarth, chief executive of lobbying group FairPensions, had previously said that the amendments would provide pension savers with a greater ability to make their pension funds accountable for the way these types of risk are being managed.