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Pension fund managers under scrutiny over engagement with investments

PENSION fund managers face mounting pressure to use their shareholder powers to engage with the companies they invest in, according to a survey of pension schemes by the National Association of Pension Funds (NAPF).<br /><br />Almost half of pension schemes questioned said they will be spending more time checking that the fund managers they employ to run their assets are actively engaging with the stocks they are investing in.<br /><br />&nbsp;It has been suggested institutional investors &ndash; such as pension fund managers &ndash; failed to speak out to prevent failures that led to the credit crunch, like the disastrous acquisition of ABN Amro by RBS in 2007. <br /><br />The survey, based on the responses of NAPF fund members with over &pound;1bn of assets, suggests 49 per cent of schemes are to spend more time scrutinising their fund managers to ensure engagement is satisfactory.<br /><br />Over three quarters of the schemes said they are to ramp up their focus on how their fund managers report on their corporate governance engagement, while 57 per cent will pay more attention to the votes their managers are casting at company general meetings of shareholders.<br /><br />NAPF corporate governance head David Paterson said there is more work to be done to ensure pension funds improve their oversight of their fund managers.<br /><br />The survey added that 59 per cent of pension schemes believe a lack of relevant skills is preventing them from ensuring greater levels of shareholder engagement.