UK - Government plans to force pension funds to be more active as shareholders have been lambasted by the NAPF.
It believes the proposals - which follow recommendations set out in the Myners report - will heap more legislative burdens on to schemes.
NAPF investment director David Gould said: “Our concern is whether the proposals now set out by the government - which is essentially to introduce legislation on an American style basis - is the best way forward.”
He added: ‘We think that legislation is unlikely to achieve the objectives and we hope to come up with work to achieve the same end but not to introduce legislation.”
And the Association of Chartered and Certified Accountants – which represents the majority of pension scheme accountants – questions the very basis of the proposals.
The ACCA claims the new laws would effectively make trustees and fund managers shadow directors of the company when they intervened. As such, they would assume significant responsibilities and liabilities.
ACCA head of business law John Davies said: Fund managers already owe a duty of care to their clients. Together with any specific instructions which might be given by trustees, this should be sufficient to guide managers in deciding how to react to events in investee companies.
He added: “Fund managers should not be routinely expected to intervene on wider, governance-related matters.”
Other proposals put forward by the government include legislation on independence of custodians and a duty of care requirement for trustees.
The government consultation on the three legislative changes will end today.
By Jonathan Stapleton
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