UK - Schemes have warned the government that legislation on the Myners Report will derail its plans for simplification.
The warning coincides with three independent surveys by Watson Wyatt, Mercer Investment Consulting and Hewitt Bacon & Woodrow, which all found that the majority of trustees are in favour of a voluntary approach to Myners’ principles.
J. Sainsbury Pensions and Death Benefits Scheme manager Geof Pearson said legislation would add to the burden on schemes and conflict with the notion of simplification.
Universities Superannuation Scheme chief executive David Chynoweth agreed and warned the government that it would be “extremely difficult” to legislate on Myners – especially over transaction costs.
Watson Wyatt found that only 19% of trustees backed legislation while 61% of scheme trustees were in favour of the voluntary approach. The remainder were undecided.
Mercer found that 86% of schemes have discussed implementing the Myners principles while Hewitt says 68%of schemes are now compliant with the recommendations.
HSBC Actuaries and Consultants head of investment practice David Clare stressed that legislation would focus attention away from the “key point of adding value efficiently”.
But some consultants fear that, despite the concerns raised by many industry commentators, the government will have to choose a hardline approach to the principles put forward in the review by former Gartmore chief Paul Myners.
PricewaterhouseCoopers partner John Shuttleworth said the quality of trusteeship was still lacking.
“Fund managers have an information advantage over their clients and the government has a got to have a role in improving their chances of getting good service.
“But trustees have still not raised their game, so unfortunately perhaps legislation will be needed.”
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