Rory Murphy, trustee chairman of the Merchant Navy Officers Pension Fund (MNOPF), says trustees must do more to share best practice in bid to improve outcomes.
I fully support any move by the regulatory authorities to improve clarity and competition in the investment consultancy industry, including the Financial Conduct Authority's (FCA's) decision to refer the industry to the Competition and Markets Authority.
However, it would be simplistic to pin the entire responsibility for any shortcomings on the consultants. The FCA's own academic research identifies a number of factors that can lead to trustees "being unwilling or unable to challenge consultants, and therefore to accept strategies they do not fully understand". As a pension fund trustee, I find this just as worrying as any weaknesses in the consultancy industry.
Many schemes have achieved great results by implementing a rigorous and effective governance structure, by challenging their advisors, and ensuring they are absolutely clear on every point when making critical strategic decisions. In striving for better outcomes, greater sharing of best practice among the broader trustee community could play as valuable a role as any regulatory intervention.
Ultimately, any trustee who fails to ask questions, or goes along with decisions without fully understanding them, is failing the very people whose interests are at the core of this issue - namely, the members of their pension schemes.
Rory Murphy is trustee chairman of the Merchant Navy Officers Pension Fund
Pensions schemes with sponsors facing severe economic difficulties due to Covid-19 must prepare for the lifting of temporary protections from corporate insolvency at the end of the year, Aon says.
Lady Tina Green has agreed to pay a £50m deficit recovery contribution (DRC) to Arcadia’s pension schemes earlier than scheduled.
Scheme funding in the defined benefit (DB) universe has worsened, but the Pension Protection Fund (PPF) remains confident it can tackle the challenges ahead, it says as it launches its 2020 Purple Book.
Debenhams’ pension schemes are continuing in Pension Protection Fund (PPF) assessment after administrators failed to rescue the company from collapse.
Every month, several firms issue trackers of the aggregate defined benefit (DB) scheme funding position. See here for the November 2020 estimates on the various measures…