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.
Investors, driven by depressed interest rates, slower global economic growth and rich equity market valuations are examining non-traditional investment opportunities.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up