GLOBAL - Pension scheme trustees now have access to a code of conduct designed to promote the highest ethical standards in running schemes, developed by the Chartered Financial Analyst Institute (CFA).
The code states pension scheme trustees should act in good faith prudence, reasonable care, skill, competence and diligence and in the best interest of the scheme participants and beneficiaries.
The code also contains guidelines governing conflicts of interest, fair dealing, communication and performance reviews.
Jon Stokes, director, Standards of Practice, CFA Institute Centre for Financial market Integrity, said: "Just as shareholders trust corporate directors to look out for their best interests in a corporate setting, trustees are charged with looking out for the interests of the participants in and beneficiaries of pension schemes.
"The Code establishes just that through the provision of 10 fundamental ethical principles."
Research by Watson Wyatt showed the 11 largest pensions markets to be worth in excess of US$25trn, which the CFA said was clear evidence of the need to have a flexible yet robust system
The CFA said the code was globally applicable and broad enough to work with any type of pension scheme, regardless of size or location. It could also be incorporated in to existing pension governance guidelines.
Mark Anson, CFA, president and executive director, Nuveen Investments and member of CFA Institute Board of Governors, said: "Acting to the highest ethical standards should be foremost in the minds of members of a pension governing board.
"The code is a valuable reference tool, applicable regardless of jurisdiction and type of scheme, which can be used to address ethical responsibilities and best serve the interests of participants and beneficiaries," Anson added.
Labour Party plans to renationalise core industries and require the largest listed companies to hand 10% of shares to employees would be a "double whammy" for pensions, business leaders have warned.
A handful of industry heavyweights have begun trialling a so-called 'mid-life MOT', with positive initial results reported by all those involved.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".