Teachers’ Pension has altered its investment policy to stress fiduciary duties as it takes its role as a responsible investor more seriously.
The South Korean pension fund changed to its investment policy last month to clarify responsibilities of the fiduciary committee, according to an announcement on March 4.
The shift comes after the fund, which serves teachers and employees in private schools, adopted a stewardship code in January last year to take a more active role as a shareholder. It has since been integrating responsible investing principles into its investment process.
The revised investment policy states that the fiduciary committee is responsible for reviewing the fund’s processes concerning shareholder activities and fiduciary practices, voting policies and guidelines, and voting history as a shareholder.
The committee also provides guidance on voting matters if a voting decision should be made and reported before a shareholders meeting, for the sake of long-term shareholder interests.
The revision allowed the pension fund to delegate part of its voting power to share-issuing companies and other shareholders, in addition to its outside managers.
At the same time, Teachers’ Pension made it clear that the fund holds the ultimate responsibility for fiduciary duties and is responsible for the selection and management of outside managers in charge of the administration of proxy voting.
The fund had 20.9 trillion won ($18.4 billion) in assets under management at the end of 2020, an increase of 2.5 trillion won compared to a year earlier. Its alternative investments increased by 420 billion won in the past year to 4.32 trillion won, and accounted for 20.6% of total assets. (Reporting by Hee-yeon Han)