SPC warns negative conflict guidance does not address smaller schemes - EXCLUSIVE

The SPC’s reply to the guidance – shown to PP – says for smaller schemes, and particularly defined contribution plans, to conform to the guidance could involve disproportionate cost.

SPC secretary John Mortimer said: "Money-purchase sche-mes, particularly smaller schemes, would find it difficult to identify the key messages, if any, intended for them in the document."

SPC also felt the guidance appeared "markedly lukewarm" on the possibility of senior members of staff serving on the trustee board.

SPC said: "We do not at all question that their presence can give rise to conflicts of interest. However, we also believe if the perception is created that the regulator views them as an unwelcome presence then the damage to employer engagement with defined benefit schemes can be significant."

Sacker & Partners said the guidance was a very helpful review of a difficult area, although it was "often unduly negative".

Partner Peter Docking added: "This could add to the growing perception that potential conflict situations cannot be managed effectively, which is not our experience. Hopefully this will change in the final version."