UK - Most pension schemes do not have a formal governance policy in place, according to a new poll conducted by investment consultants Mercer.
At a seminar on trustee governance, Mercer found than many pension schemes lacked formal performance and operational objectives. Less that one in ten or 7% of the attendees said they had written objectives for their scheme.
The Department for Work and Pensions is currently formulating plans to introduce a new pensions regulator, so trustees need to ensure their plan management procedures stand up to scrutiny, said Mercer.
Elizabeth Renshaw, European partner at Mercer, said: There is an opportunity for trustees to seize the initiative and implement robust governance procedures which will enable them to do their job more effectively.
Trustees have a responsibility to safeguard scheme members‚ interests and protect fund assets by maintaining control over schemes.
“Without written objectives and policies, they will struggle to demonstrate they have adequate risk management systems, frameworks for effective decision making or their accountability to members.
She said that a “new culture” of pension scheme governance had begun to emerge following the Myners Review, and the Pensions Bill provisions have added impetus.
“Trustees should adopt some of the business disciplines that scheme sponsor consider normal practice, to help improve their effectiveness.
“More resources may need to be applied to pension scheme operations, but it is clear that the extra investment will result in substantial benefits.
A major concern among seminar attendees was how to implement pension scheme governance and prioritise tasks.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers