GLOBAL - The Organisation for Economic Co-operation and Development (OECD) has released revised guidelines on pension fund governance, which will be open for public consultation until 1 October.
The draft document pointed out some of the governance failures could be solved through a more balanced representation of stakeholders in the governing body of the pension funds.
Further, higher level of expertise achieved through training or through the appointment of independent trustees and the adoption of codes of conducts addressing conflicts of interest would help address governance failures.
The guidelines emphasised the need to tackle the lack of governance arrangements for defined contribution pension plans. The ways suggested were the creation of management committees, increased fiduciary responsibility for relevant parties and a strengthened role for pension supervisory authorities.
Economies of scale and cost reduction could be achieved in some countries through the consolidation of the pension industry. This would also be beneficial to pension fund governance, the document pointed out.
The draft OECD guidelines are primarily addressed to governments, pension fund supervisors and pension fund associations.
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