UK - The Pensions Regulator (TPR) has been urged to address issues in its conflicts of interest guidance which it has been claimed could push the UK further towards becoming a defined contribution (DC) nation.
Louise Inward, head of pensions, PWC Legal, exclusively told Global Pensions: "The document states the employer nominated trustee role could cause major conflicts of interests in pension fund meetings.
"It suggests blocking them from voting on some issues and even not being present when others cast theirs. This could mean pension fund boards could miss out on knowledge of the company position and often considerable financial experience."
PWC said employer representation was essential in encouraging companies to maintain DB pension schemes.
"Without a representative on the board, a company which assumes all the risk and costs associated with a pension fund could be trapped with decisions over which it has no control," Inward said.
"This will only serve to give employers more reason to close DB schemes."
TPR said the matter would have to be addressed on a scheme by scheme basis, but recognised there would be instances where an employer nominated trustee could sit in the day-to-day running and provide valuable expertise and input.
A TPR spokesman said: "However, in certain circumstances, such as an acute conflict, the trustees with the advice of their advisers may feel that the individual should not take part in a decision or even that resignation and appointment of an independent trustee should be considered."
PWC also cited the 50 instances where TPR's guidance directed trustees to seek legal advice each time it addressed conflicts of interest, claiming it was against government best practice.
Inward concluded this could cost the fund substantial lawyers' fees which would ultimately impact on members' pension payments.
TPR countered that using an independent trustee who would not necessarily have to be a professional was one possible solution.
TPR said the document was intended for consultation and it continued to welcome responses.
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