GLOBAL - Private pension funds have not been using benchmarks that measure them against their long-term goal of providing income replacement, a preliminary report by the Organisation for Economic Co-Operation and Development (OECD) found.
The findings, presented at the OECD/IOPS Global Forum on Private Pensions in Rio de Janeiro last week, found that private pension funds were being evaluated in the same way as investments meant to generate wealth.
OECD senior economist Pablo Antolin and World Bank senior economist Rudolph Heinz said: "Market mechanisms currently focus too much on the short-term returns. The key message from this project is that we need to find a better balance between the role of the market and the role of government in enhancing the performance of pension funds and reducing the risk of individuals' retirement with insufficient income due to the misallocation of their pension assets."
The final results from the project will be released in December.
Also at its global forum, the OECD said Latin America's pension sector has emerged stronger after the global crisis.
The OECD said: "Governments and pension regulators have resisted pressures to nationalise their pension assets. Indeed, they have adopted quite the opposite approach - continuing to press ahead with reforms of their private pension systems."
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
This week's top stories include the government spending £800,000 on a Gogglebox advert and MPs writing to The Pensions Regulator about its engagement with the Railways Pension Scheme.