First DC pension takes up pass-through voting with Tumelo
London, United Kingdom — In a move to ensure voting consistency across its investments, the Superannuation Arrangements of the University of London (SAUL), with assets under management (AUM) of approximately £3 billion, has become the first UK pension scheme to take up pass-through voting for both its DC and DB plans.
Pass-through voting allows pension schemes to enforce their voting preferences on AGM resolutions within their pooled-fund investments. By adopting this technology, SAUL can uniformly apply its voting policy across its segregated and pooled funds for both DC and DB plans, enhancing its overall stewardship impact. It allows the scheme, for example, to directly influence decisions on key issues, such as remuneration and climate change, by voting in line with its responsible investment values in pooled funds. SAUL is particularly focused on voting for resolutions at the Climate Action 100+companies, as well as its top 500 holdings.
This move follows a similar decision by the £2 billion Local Government Pension Scheme (LGPS) for Camden, highlighting an upward trend of pension schemes taking action to align their voting across their equities. Both SAUL and Camden are clients of Legal & General Investment Management (LGIM), which has partnered with Tumelo to offer this voting capability. Traditionally, votes in SAUL's segregated mandates were cast according to its values through a custom voting policy managed by PIRC, while votes for its pooled funds were controlled by LGIM.
Georgia Stewart, CEO of Tumelo, says:
"DC pension funds are growing more conscious of their ability to influence the companies their money is invested in. Pass-through voting plays a pivotal role in magnifying their influence, guaranteeing that their investments align with their objectives. From here, the stewardship landscape will only become more complex. Tumelo is helping fund managers like LGIM to respond by enhancing their fund offering with vote customisation."
Kevin Wade, CIO of SAUL, says:
“It’s great to see three of our partners, Legal and General, Tumelo and PIRC, working together to help SAUL implement its voting policy across more of our investments. This will also give SAUL more influence and a stronger voice when engaging with portfolio companies.”
Alan MacDougall, Managing Director of PIRC, says:
"We are thrilled to extend our work with SAUL to enhance voting consistency and better align their investment principles across their investments. PIRC's tailored Voting Guidelines, combined with our detailed company research and risk assessments, allow us to provide SAUL with precise, bespoke voting recommendations that reflect their values and expectations."
Stuart Murphy, Head of Client Platforms at Legal & General Investment Management, says: “At LGIM, we see it as a privilege to manage money on behalf of our clients. Many of those clients choose LGIM and stick with us for our Stewardship policies and the depth of our engagement with companies.
“A key element of our approach to Stewardship is working closely with all our clients to reflect their views when it comes to important issues; and where a client such as SAUL wishes to vote we are able to support this option via our pooled DB and DC Funds, thanks to our partnership with Tumelo. SAUL’s decision to vote across all their assets including DC is a new development for the market – it will be interesting to see if other DC Mastertrusts also follow this path.”