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Stewardship "made simple" for Pension Funds

10 March 2011

A new guide is being published today (Thurs) to help pension funds implement the Stewardship Code.

With Stewardship made simple: Practical Steps for Pension Fund Trustees in applying the Stewardship Code, the National Association of Pension Funds (NAPF) aims to encourage more pension funds to sign up to this important Policy. The guide has been jointly produced with Aviva Investors, which is also sponsoring it.

The Stewardship Code was issued by the Financial Reporting Council (FRC) in July 2010. Its objective is to facilitate better engagement between organisations and shareholders to help improve governance and long-term returns.

The Code is primarily directed at investment managers who act on behalf of asset owners. But asset owners, such as pension funds, are also strongly encouraged by the FRC to report if and how they have complied with the Code’s Principles.

The guide is being launched at the NAPF Investment Conference in Edinburgh today. It is structured around a simple ten-step framework that outlines the steps that pension fund trustees need to take to develop and implement a stewardship policy based on the Code.

David Paterson, Head of Corporate Governance at the NAPF, said:

“Pension fund trustees should monitor their investment managers to ensure they take their stewardship responsibilities seriously. Active ownership practices, such as engagement, help asset owners and managers to make the most informed investment decisions, which will lead to better long-term performance.

“We strongly encourage all pension funds to sign up to the Code and with this guidance we hope to make it as simple as possible for them to do so.”

With an array of practical examples, it explains what pension schemes need to do to implement the Stewardship Code. It is an important addition to

NAPF’s well-known made simple series.

Iain Richards, Regional Head of Corporate Governance from Aviva Investors, said:

“We are delighted to have been able to work with and support the NAPF in offering trustees this ‘made simple’ guide. Recognising the weight of issues on trustees’ agendas, the objective for ‘Stewardship made simple’ has been to provide a clear framework and practical step-by-step guide to assist trustees in addressing this in a way that is appropriate to their schemes.

“Pension fund trustees have the potential to have a significant impact on how effectively the stewardship and handling of related risks is tackled across their company investments; not least by their investment managers. That potential should not be underestimated.”

The guide is officially launched at the NAPF’s Investment Conference in Edinburgh (NAPF stand) at 5.15pm on Thursday 10th March (today). Its hard copy costs £18 for NAPF members and £35 for non-members. It can be ordered online at www.napf.co.uk

Notes to editors:

1.   David Paterson is available for interview.

2.   Other recent made simple guides include Transition Management made simple, Custody made simple, Indices & Benchmarks made simple and Defined Benefit Governance Structures made simple.

3.   Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 14 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of almost £260 billion at 31 December 2010.

4.   The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,200 pension schemes with some 15 million members and assets of around £800 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.

Contacts:

Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]

Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]