UK - Government plans to increase member-nominated trustees to 50% will distract from providing real measures to restore confidence in pension schemes, Mercer Human Resource Consulting claims.
Work and pensions secretary Alan Johnson unveiled the move at the Trades Union Congress and claimed it would widen the range of skills and experience on trustee boards.
“If the workforce is involved in the running of their scheme it can make them feel they have a real stake in their pension provision and could persuade more people to join,” he said.
But Mercer European partner Tim Keogh (pictured) said member-nominated trustees should be further down on the government’s list of priorities.
He said: “We’re staggered. The government is struggling to get the Pensions Bill through parliament and cannot yet explain how key provisions like the Financial Assistance Scheme will work. Its resources are clearly stretched, yet out of the blue it finds time to tinker with member-nominated trustee rules, which have already been strengthened.”
He added: “What’s the point of having a rule requiring member involvement if there are no schemes to be involved in? Or is this just confirmation that compulsory schemes are around the corner?”
Alexander Forbes Financial Services director Nigel Chambers described the move as another example of the government tinkering with pensions when far more decisive action is needed.
He added: “It would be far better to introduce regulations that require companies to appoint highly trained professional trustees to guide and support both company sponsored and member-nominated trustees.”
“These days, when more pension schemes are being forced into conflict with their sponsoring company, it is far better for all members to have a strong professional trustee on board than any number of employee-nominated or company-sponsored trustees who will have to have one eye on their own relationship with their employer rather than being solely focused on the members’ needs.”
Conservative work and pensions spokesman David Willetts said Johnson’s speech “disappointed everyone who hoped he would set about tackling the pensions crisis”.
He added: “More than seven years after coming to office, Labour’s response to the pensions crisis is to “examine”, “analyse” and “consider” rather than do anything about it.”
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