UK - Impending legislation is "scaring off" employees from becoming trustees of their pension schemes, Mellon Financial claims.
The firm said that the new legislation would also fuel an upsurge in demand for practical training.
New legislation expected to come into force from April 2005 contains a new series of statutory duties for trustees, including specific knowledge requirements, with personal penalties for failure to discharge them properly.
Mellon said these new provisions will only add to the burden trustees currently face in trying to balance their ‘day jobs’ with their responsibilities as trustees
Kevin LeGrand, head of technical services at Mellon HR&IS, said: “Over the past few years we have become aware of a steady decline in the number of people willing to stand as trustees, and these new provisions seem likely to scare even more people away from the role.
“If this trend were to continue, it would not only be a blow to the effectiveness of occupational schemes, but would also undermine a central plank of the Government’s strategy to encourage more member participation and control of schemes.”
LeGrand also warned against the introduction of compulsory training, which is being mooted by some parties. He said: “Such a move would inevitably spawn a whole new level of bureaucracy, with pressures on scheme costs. History tells us to expect that such a move would be the first step on the road to regulation of trustees, ending in a requirement that only professionals be appointed in future.”
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