In our August 2009 update we noted that HM Treasury had published Sir David Walker’s “Review of corporate governance in UK banks and other financial entities.”
The final report has now been published and in respect of pensions recommends the following:
- recommendation 21: engagement - pensions funds (particularly those in the public sector) and other institutional investors should actively seek opportunities for collective engagement to promote good governance in the invested companies;
- recommendation 31: disclosure - from the “2010 year of account” the remuneration committee report for relevant entities should disclose the total expected remuneration of “high end” employees whose total expected annual remuneration is above £1 million (including pension contributions). The disclosure should not give the individuals’ names; and
- recommendation 37: restrictions on enhancements - there should also be disclosure of high-end employees’ enhanced benefit arrangements (including discretionary benefits) particularly in connection with ending employment. Walker suggests that in future such employees should not have an automatic contractual right to an enhanced early retirement pension or other exceptional payments based on performance. New and existing contracts should be reviewed as a matter of best practice.
View the final report.