Pension funds back FRC code

A RAFT of UK pension funds have come out in support of the Financial Reporting Council’s (FRC’s) new Stewardship Code.

Eleven pension funds, collectively valued at £180bn, have banded together to back the new code, set out by the FRC in July.

In a letter sent to the financial watchdog, the pension funds said they “welcomed the FRC’s initiative” and the code’s “potential to enhance the quality of engagement between institutional investors and companies”.

The BT Pension Scheme Management, BBC Pension Fund, RAILPEN Investment, Environment Agency Pension Fund and the University Superannuation Scheme were among some of the largest of the signatories.

Daniel Summerfield at the Universities Superannuation Scheme, said: “The onus is now on institutional investors to respond positively and constructively to the Code if we want to avoid any further regulation in this area.”

Regional pension funds, Lothian Pension Fund, Local Authority Pension Fund Forum, Merseyside Pension Fund, Northern Ireland Local Government Officers’ Superannuation Committee, Strathclyde Pension Fund and the West Midland Pension Fund were also involved.

The Stewardship Code is aimed at creating more transparency over how investors oversee the companies they own, with hopes that it will act as a catalyst for better engagement between shareholders and companies.

The FRC has said that it will continuously review the code, a move heralded by the pension funds.