UK - Schemes will be forced to adopt mandatory governance legislation if voluntary guidelines are not followed, delegates at the recent NAPF Conference were told.
PricewaterhouseCoopers partner Andrew Evans says the incentives for good governance must be clear to schemes and placed high on the agenda.
He said: “Although schemes are increasingly committed to improving their governance standards there is still some way to go.”
Evans – speaking in the trustee governance seminar with Mineworkers Pension Scheme chairman of trustees Norman Braithwaite – stressed the importance of raising trustees’ knowledge and investment understanding, which he said was significantly below industry requirements.
He pointed to PwC’s corporate governance survey, released last month, which showed 45% of trustee boards have failed to complete a skills assessment program.
Evans said: “If trustee boards are not aware of their skills gap they cannot effectively implement the right measures to better serve scheme members.”
He added that trustee boards should look to better those who come forward as a trustee through greater education before employees take up a post.
Braithwaite underscored the importance of trustee training. He said: “As an industry we must continue to strive to improve trustee training competence. While efforts are being made by trustee boards to plug knowledge gaps there is room for improvement.”
Braithwaite added that the Pensions Management Institute and the National Association of Pension Funds needlessly compete with different trustee examination certificates. He said it would be to the benefit of the industry if the two bodies worked together to produce a united qualification.
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