Janice Turner, Co-Chair of the AMNT said: “We consider the current proposals to be a capitulation to the interests of fund managers at the expense of betraying those of pension scheme trustees, using the fig leaf of streamlining.”
Key objections to the code include the redefinition of stewardship and the emasculation of the 2020 code’s Principle 6*.
Principle 6 of the 2020 code sets out requirements for fund managers in relation to their trustee clients and pension schemes to their beneficiaries. In trying to combine the two different sets of responsibilities, the replacement wording places trustees – with all their legal responsibilities on stewardship – on a par with beneficiaries, who have none. AMNT believes this is completely unacceptable.
Turner continued: “In our view the new wording reduces pension trustees to the role of passive recipients of material from fund managers and undermines rather than enhances the role expected of them by the Pensions Regulator of being active stewards of their assets, required to hold the fund managers to account for the stewardship activities carried out on their behalf.
“Surely this is not what the FRC intends?
“We will strongly oppose the code being implemented until appropriate amendments to the proposals are made.”
Background:
*Principle 6 of the 2020 code required asset managers to explain; "how assets have been managed in alignment with clients; stewardship and investment policies". It also requires them to explain "how they have taken account of the views of clients and what actions they have taken as a result"
Both of these requirements are deleted.
-Ends-
A copy of AMNTs full submission can be requested from Andrew Sharkey on this email address
*For reference, Principle 6 is replaced in the proposed 2024 code by the new section (e).For further information please contact Andrew Sharkey via this email address or on 07711 825439.The Association of Member Nominated Trustees was established in September 2010 to bring together member-nominated trustees, directors and representatives of public and private sector pension schemes to give trustees a collective voice, to provide mutual support and information exchange and to campaign on matters of concern. Our members are from pension funds with collective assets of approximately £1-trillion. In addition our membership is focussed on speaking on behalf of pension scheme members, because being a scheme member is a requirement for becoming an MNT and has a particular part to play in scheme governance.
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