UK - Trustees risk being made scapegoats for the pensions crisis and the government's failure to address member security, experts warn.
Gissings chief economist Roger Nightingale fears trustees could be targeted if their asset allocation decisions result in poor performance and lost benefits.
And he points out that with global markets heading towards severe economic depression – caused by a devaluation in several major world currencies – trustees will face increasingly difficult decisions in asset allocation.
Nightingale says if these decisions result in poor performance, there is a chance the government will encourage members to seek redress from trustees.
He explained: “There is a great danger the government will look for a scapegoat.”
Hammonds national pension team head Andrew Powell agreed the government would try to point some of the blame at trustees.
He said: “After setting policy, a government’s second main priority is avoiding liability for the policy.”
Powell pointed out that even though trustees took advice from a variety of consultants and fund managers, the final legal responsibility was theirs.
He recommended trustees set down a “paper trail” showing why decisions had been made and on whose advice.
But trustees are not convinced that the government will take such drastic action.
Capital Cranfield Trustees managing director Bob Bridges said: “I don’t think trustees will get huge amounts of blame – all they can do is explain the comprehensive process that led to the current investment strategy and then explain what the strategy is going forward.”
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