The National Association of Pension Funds (NAPF) said at the weekend it planned to make a submission to the Institute and Faculty of Actuaries (IFA), which has been pressured into reviewing its formula for calculating bosses' pension benefits.
The confrontation is set to turn into a back-room showdown between institutional investors - favouring full disclosure - and public companies, which want a watered-down version.
The NAPF said it was still considering the issue, but was leaning towards supporting the original formula, which was thrown out by the Exchange and the DTI three weeks ago.
"We support Greenbury," said an NAPF spokesman. "We're likely to make a submission supporting the line taken originally by the Institute and Faculty."
Geoff Lindey, a member of the Greenbury Committee, speaking in his role as chairman of the NAPF's investment committee, said: "The disclosure of pension benefits should be done properly. Greenbury is all about disclosure, accountability and motivation."
Other fund managers said full disclosure was necessary not just to help investors, but to assist company remuneration committees when considering pay rises for executive directors. "Some remuneration committees that have given large awards did not realise how expensive the pensions would be," said one. "Even if it does not cost you cash right now, it reduces your pension fund surplus."
The formula proposed by the IFA would have calculated the full cost of funding an executive's pension, which could be many times higher than the corresponding increase in basic salary.
Directors typically become eligible for full pension benefits equal to two-thirds of their final salary after just 20 years, compared to 40 years for ordinary employees. And the size of pay rises in their last few working years can dramatically increase pension entitlements in the long run.
However, listed companies are worried that revealing the true cost of funding generous pensions would leave them open to embarrassing headlines similar to those that outraged the public over the last year and led to the formation of the Greenbury Committee on top pay.
Most public companies are thought to favour a "smoothed" version of the formula, which would average the costs out over several years, thus disguising large increases.
The Association of British Insurers, the City's other main institutional pressure group, also supports a new formula, but for a different reason. It argues that for true comparison, the calculation would have to take into account conditions placed on the pension and the chance that a director may be forced out of office before the end of his term.
The pension committee of the IFA is currently preparing a consultation document, which will be circulated among members of the profession as well as public companies and institutional investors.