Pensions - Articles - Giving members a vote is a dangerous illusion


PTL have said as an Industry we should proceed with caution when it comes to giving members’ the illusion they have voting rights on the shares in their pension schemes.

 Richard Butcher, MD at PTL, commented: “Much is being said around voting at the moment, not unsurprisingly given the vitally important role trustees have to play in stewardship and the AGM season upon us. However, when it comes to giving members a sense they have a say in those votes it becomes far more complicated and we risk creating a dangerous illusion for them.

 “Stewardship is our chance to influence the companies we invest in to adjust their business to ensure they also manage ESG risk and, in the process, become more sustainable. But, and it’s a big but, most schemes invest in pooled funds which presents two critical challenges that are hard for trustees to overcome. First and foremost, due to intermediation, schemes rarely have ownership rights and are often several steps removed from the actual legal owner. Then there’s the issue of scale; a handful of schemes may command the attention of the managers, but the majority, in isolation, will not.”

 Butcher added: “All of this means that the ability of most schemes to influence is pretty weak with the one “real” power, currently, being the threat to fire their manager – and it’s debatable how effective that is.

 “In these circumstances giving members a sense they can influence a vote is a wrong and creates a potentially dangerous scenario that could give rise to member dissatisfaction. In a worst-case scenario it could lead to opt outs, a potentially disastrous unintended consequence that we need to do our best to avoid.”
 
 Butcher concluded: “Lots of work is being done on how to give trustees genuine leverage when it comes to voting, and we not only welcome but are active participants in that and it’s great to see the industry tackling the climate emergency. The key part now it to demonstrate to the members that their investments are doing good things for the world we live in – without giving them any false illusion of power.”
  

Back to Index


Similar News to this Story

94 percent view State Pension as an entitlement not benefit
Majority of adults aged 66+ say that Triple Lock is affordable and fair to older generations. Around one in seven rely on the State Pension to provide
Fair play off the pitch
Male players in the English Premier League earn an average of more than £3 million per year, while their female counterparts average around £47,000. T
Why Bitcoin matters to Pension Schemes
Back in November 2024, Cartwright Pension Trusts announced its role in facilitating the first-ever UK DB pension trust investment in Bitcoin. With the

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.