UK government plans to review the way pension funds are reacting to Myners' proposals are being labelled as a bullying tactic by the industry.
Experts believe the government will draw up legislation to enforce adoption of the Myners code – which is to be published at the end of next month – if the review uncovers widespread non-compliance.
But industry sources claim this would amount to a big-brother-style management of occupational schemes.
Consultants expect the adoption of the code to be made mandatory within two to three years. This, they say, will lead to the erosion of the occupational pension scheme market.
The government's intention to undergo a further review was confirmed by Chancellor Gordon Brown in his Mansion House speech.
But this decision has been described as interfering by Buck Consultants technical and legal expert Kevin Le Grand. He said: We see this bullying tactic as a wholly inappropriate intrusion into the investment process of company pension schemes, that will defeat the government’s overall welfare objectives for the country.”
The Treasury has confirmed that the review will begin March 2003. And while no details about how the review will be conducted have been revealed, Le Grand expects that OPRA will be involved.
Industry experts, though, claim that OPRA is already over-stretched and would be hard-pressed to cope with a any further regulatory burden. He added: The worry that if details [from schemes adopting Myners] were sent to OPRA then people would think that OPRA was going to do something with them. There is no way it would have the resources to do that.
Institute and Faculty of Actuaries' pensions board chairman Peter Tompkins had reservations over the focus of Brown's review.
He said: “We would be very concerned if any review initiated by Gordon Brown were to focus on investment behaviour rather than on the degree to which trustees considered suitable investments to match their liabilities.
However, while the Myners Code is seen by many as, possibly, the straw that breaks the camel's back – particularly for smaller schemes – most agree it is far from the biggest cause for concern.
Towers Perrin principal Michael Parker said: “I do agree that a shake up of the restrictive compliance regime would be helpful for the occupational pensions environment, but the prospect of an early and radical simplification seems depressingly remote.”
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