Asymmetric autonomy: pension fund investing between members and markets

Abstract Pension funds occupy a special position in the financial system: their long-term investment orientation and social outlook have led to calls for pension investment for purposes beyond the provision of retirement income. Scholars of financialization have questioned the possibilities to mobilize pension assets for other (e.g. social or environmental) goals by pointing to the constraining power of financial intermediaries. This article explores potential constraints on pension fund investments through an empirical case study of pension funds in the Netherlands. We show that pension funds’ position between members and financial intermediaries restricts their capacity to act as autonomous investors, albeit in asymmetric ways. Although pension fund boards are required to consider member preferences, knowledge deficits and organizational distance enable them to carve out discretionary space. However, due to regulatory requirements, their autonomy vis-à-vis financial intermediaries is more limited. We illustrate our findings with regards to pension funds’ adoption of sustainable investment.