PLSA and Investor Forum publish new guide to help schemes deliver effective stewardship

The Pensions and Lifetime Savings Association (PLSA) and the Investor Forum have today published a practical and accessible toolkit to help pension schemes assess the effectiveness of their asset managers’ delivery of stewardship.

While all pension schemes and asset managers are giving much greater profile to the issue of stewardship and engagement, no two schemes are alike and no two asset managers offer identical services. Some schemes seek to deliver engagement directly themselves, but the majority look to their appointed fund managers to carry out engagement on their behalf.

This new joint guidance – Engaging the Engagers: A practical toolkit for schemes to achieve effective stewardship through their managers – provides a framework for asset owners to “connect the dots” between the asset managers they employ, to demonstrate the value of effective stewardship and engagement across their investment portfolios.

The objective is to provide a framework and, most importantly, practical insights which can contribute to an effective alignment of the investment chain to enable pension schemes, and all asset owners, to meet their long-term obligations through their asset managers.

The guidance focuses on the key questions that schemes need to ask their asset managers to ensure they are effectively engaging on schemes' and savers' behalf. It also provides a framework against which to assess the quality of asset managers' engagement and stewardship work.

The guidance includes:

• Definitions of stewardship and engagement, and their application across different asset classes
• An outline of how to frame an overall pension scheme stewardship strategy
• A framework for understanding and distinguishing between different forms of engagement
• An overview of what effective engagement looks like and the key factors for successful delivery
• The key questions schemes need to ask of their asset managers.

Caroline Escott, Senior Policy Lead for Investment and Stewardship, PLSA said:

“Policymakers, regulators and savers increasingly expect schemes to act as good stewards. Yet effective stewardship and engagement do not simply happen. Pension schemes can help ensure that engagement occurs and delivers value by articulating their expectations, working to encourage better activity by fund managers, and monitoring the effectiveness of delivery over time.

“Ultimately, a well-connected chain is likely to be much more effective in delivering engagement outcomes. This guide, produced in partnership with the Investor Forum, will gives asset owners a structured framework for engaging with their asset managers and setting and assessing the effectiveness of their stewardship strategy.”

Andy Griffiths, Executive Director of the Investor Forum, said: “We are delighted to provide this toolkit to assist PLSA members and other asset owners in examining and challenging the effective delivery of stewardship by their fund managers. By focusing attention on the quality of engagement capability and the delivery of tangible outcomes, we hope to strengthen the market for stewardship. This practical guide can help to put stewardship at the heart of the investment process for pension funds.”

Click here to download the guide.

Mark Smith, Senior PR Manager
 020 7601 1726 |  [email protected]k

Steven Kennedy, PR Manager
 020 7601 1737 | 07713 073024 | [email protected]