Partner Anna Copestake comments in Pensions Expert on pension scheme voting powers
With the cost of living crisis squeezing consumers’ spending power, recent research has shown that one in seven adults anticipate accessing their pension earlier than planned, while the world’s five largest oil companies have seen a combined profit of almost $50bn in Q2 2022.
Anna Copestake commented that “Trustee legal duties must be complied with and there remain important questions about the scope of what trustees can do beyond making decisions through a financial lens.”
If Trustees considered it in member interest to engage, it’s not straightforward, however, as the majority of schemes are invested in pooled funds and so are not the legal owners of their shares. Here the Trustees’ power, Anna commented, “lies in the ability to engage with the manager.”
Ultimately, trustees could “fire the manager if it doesn’t vote in a way that the trustees agree with”, although they might be a “small fish in a large pond”.
“There is a suggestion that trustees set an expression of wish asking managers to vote in a certain way,” Anna explained, saying that while managers will not have to follow it to the letter, it would allow trustees to monitor whether the manager’s policies are aligned with their own.
Practical issues around operational systems still impede many managers, but solutions are being explored, she added.
The profits of energy and fossil fuel companies will remain controversial throughout the ongoing cost of living crisis, but for now Trustees’ fiduciary duties remain a priority.
Read Anna’s comments in Pensions Expert.
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