This month I posted the last in the series chronicling the development of UK private sector pensions from World War Two to today. The final piece of the jigsaw explains how the government first ‘staged’ and then ‘phased’ auto-enrolment from 2012. November also saw the publication of an article examining how the styles of equity investment strategy shape the way different European pension schemes engage with companies. A piece published on Financial Scale Partnership’s website discussed the responsible investing challenges faced by passive asset managers. I returned to Times Radio to discuss AstraZeneca and ‘no deal’ Brexit on 24th November.

Auto-enrolling the private sector

Government policy can fail if it isn’t implemented effectively. This post explains how the coalition government avoided this fate by taking a considered approach to the implementation of auto-enrolment. First pension schemes were ‘staged’ then contributions were ‘phased’. Larger employers bore the brunt of technical payroll difficulties so things happened more smoothly once smaller employers got involved. And slowing ratcheting up the contributions levels kept the opt-out numbers low.

Approaches to engagement

While many European pension schemes actively engage with companies to improve corporate behaviour, this article explains how this activity is shaped by their equity investment strategy. Those which actively manage their portfolios are able to exclude and select stocks more than those with a passive approach. But all recognise the need to ensure engagement programs produce tangible results. The more enlightened recognise working with other stakeholders is the most effective way to achieve change and many point to the success of Climate Action 100+ at persuading oil and gas majors to adopt net zero targets.

Are passive investors serious about social responsibility?

Earlier this year assets under management at passive asset managers reached more than $10tn increasing the pressure for these companies to take their social responsibilities seriously. This piece examines the responsible options available to these managers. The choices are narrower than for those which manage their portfolios actively – exclusions are harder and selections impossible when your product is designed to track an index. The emphasis has to be on effective engagement but this requires considerable resource and clear communications strategy. While some are grasping the scale of the challenge, there is more to be done.

Times Radio Early Breakfast show

On 24th November I discussed why AstraZeneca’s share price had fallen despite positive vaccine results as well as highlighting the Governor of the Bank of England’s comments about ‘no-deal’ Brexit being worse than covid. (I’m on at 49 minutes.)

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