UK - Trustees have been warned it is only a matter of time before they are sued by members over "dodgy investment policies".
Former Boots head of corporate finance John Ralfe called the current practice of having high equity weightings a “straight bet”.
He likened it to trying to pay members’ pensions by either buying lottery tickets or putting the scheme’s money on horse races.
Ralfe said the standard practice of “lifestyling” for personal pensions - shifting away from equities to bonds on approach to retirement - is being ignored by companies and trustees.
He reasoned that because the number of mature schemes – both large and small – with an equity weighting of 70% was so high, it was only a matter of time before a large company scheme collapsed.
He said: “Trustees are afraid their members will lose out through poor equity markets and the unwillingness or inability of the company to inject cash.
“Trustees have very onerous fiduciary responsibilities and could find themselves being sued for dodgy investment policy.
“A major UK company with tens of thousands of members will go bust with a big deficit.”
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