UK - Consultants have rejected claims they dominate a scheme's decision-making processes or that their performance is rarely assessed by trustees.
The department for work and pensions claims its research showed that only 15% of schemes had overruled their investment consultant’s counsel since the Myners principles were published in March 2001.
And the DWP says only 34% of respondents had mechanisms in place to measure the performance of their consultant.
But Mercer Investment Consulting head of investment strategy Andy Green rejected the findings.
He said: “Trustees do challenge the advice they receive from investment consultants in a number of areas as they want to feel comfortable with what the consultant is doing.
“As an example, many consultants are talking about allocating to alternative asset classes.
But trustees are going through an education process so they can understand and challenge what their consultant says. Trustees do want to debate and discuss things with their consultants – they rarely just accept it.”
The DWP also claimed that trustees rarely tender investment consulting briefs. It said only 28% have held a competitive tender process within the last two years, compared to 44% which had held tenders for fund managers.
Hewitt Bacon & Woodrow head of investment consulting Andrew Tunningley said: “A lot of trustees will disagree with the DWP’s claims.
They are not stupid people. It is clear that clients are reviewing their advisers in a proper way, and that has led to more tendering. There’s been a dramatic change in the landscape.”
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers