UK - The much-anticipated Pensions Bill will contain legislation requiring improved levels of competency among trustees, delegates at recent conference heard.
Speaking at the NAPF’s Corporate Governance conference, financial secretary to the Treasury Ruth Kelly (pictured) – the conference’s keynote speech – said the government wanted to promote higher standards and better trustee training.
Kelly said: “Trustees rely too heavily on advice from consultants over asset allocation and the interchange would be more efficient if they could challenge this when necessary.
“We want to see trustees becoming more familiar with asset allocation and legislation, which in the coming Bill – being finalised by the department for work and pensions – will clarify the level of understanding expected.”
The minister said the new pensions regulator would issue guidance on trustees’ legal obligations.
But delegates pointed out that training was already taken “very seriously” and the proposals would be counterproductive. They also warned the minister that if the government insisted on higher levels of understanding, there was a danger member-nominated pensioner trustees would be deterred altogether.
Kelly welcomed the industry drive to raise levels of corporate governance – particularly the combined code. The challenge now for shareholders and firms, she said, was to make it work.
She welcomed the progress made by larger schemes over accountability and urged smaller schemes to do more.
She said: “There is still a striking mismatch between the short-term time horizons of fund managers and the long-term views of pension funds.
“We are hoping to see a shift away from monitoring fund managers quarterly and taking a wider view as Myners recommends.”
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