Chair's statement rules are too harsh, say Buzz peers
This week's 104 Pensions Buzz respondents agreed that the regulations surrounding chair's statements are too harsh.
They also answered questions on the pensions dashboard and the impact of Brexit on pension schemes.
The majority (62%) of this week's 104 Pensions Buzz respondents agreed that chair's statement regulations are too harsh, and cited member lack of interest as a key reason.
"Too harsh given the level of attention given to it," said one respondent, while another added: "Nobody reads them anyway - it's good intention poorly enforced." The time taken to prepare the statements was also criticised.
One peer opined: "Encouraging lengthy boilerplates that defeat the object and are unlikely to be read or understood by many of the members they are written for."
A further noted that "increasingly stringent requirements mean the document is fast moving away from the member-focused and friendly easy-to-understand document it was originally intended to be".
A total of 30% said that the regulations were not too harsh, and one said there is "no excuse" for not complying in full. "The regulations themselves are not too harsh," another said, while a further respondent added that nothing in the regulations "shouldn't easily be able to be evidenced if a scheme is well-governed".
More than half (52%) of respondents were unsure whether their scheme data would be dashboard-ready in 2020, while a quarter said it would definitely not.
Within the majority of respondents who were unsure, many said lack of clarity around what data was needed made it difficult to prepare. "We haven't heard anything official on this so are unaware of the requirements," one peer said.
Another added: "There has been no guidance issued," and a third agreed "we don't know the detail of data requirements at all yet."
One respondent who does not have their data in order said it was a low concern on a busy priority list, while another said: "Most defined benefit schemes are a long way off having suitable data." Another said it was not yet clear what the full requirements would be.
However, a total of 23% said their data was ready. One noted: "We are working hard on the delivery, however it is a challenging target for a lot of schemes."
Only 3% of respondents believed Brexit would have a very significant impact on schemes, ahead of 29% who felt it would be significant, and 13% who felt it would not be significant at all.
A majority (55%) said there would be a marginal impact, and peers in this category agreed it would be dependent on the size and circumstance of the scheme in question. One of the 55% said: "The markets have been factoring Brexit into their decisions for the last three years anyway."
One peer who said the impact would not be significant at all argued: "It will be the Millennium Bug all over again - lots of scaremongering."
However, one who said the impact would be significant said Brexit "is a disaster of epic proportions," adding that "the economy will suffer for decades and pension schemes will not be immune".
Almost half (46%) of peers this week said they would use a third-party evaluator when tendering for a fiduciary manager, ahead of 30% who would not.
One respondent labelled it "an essential part of good governance" while another agreed it was "critical to avoid conflicts of interest".
For those respondents who said they would not get a third-party evaluation, cost factored highly into the response. One said: "How many layers of adviser do we need to pay for?" Another added: "Our scheme administrator can carry out that role." A third respondent agreed that "we see no need to incur further fees for something that can more than adequately be handled in-house".
Many respondents who were unsure about the need for a third-party evaluator said it was completely dependent on the scheme in question. One added: "How would we then evaluate the third-party evaluator?"
Almost half (48%) of this week's respondents said it was somewhat important to increase diversity on trustee boards, against a quarter who felt it was very important, and 23% who believed it to be not very important.
In the majority who deemed it ‘somewhat important', one peer said it is "more important to increase the skills, knowledge and confidence of trustees", while another said socio-economic background was a more relevant consideration.
"Diverse views will increase the capacity of a board but it should not come at the expensive of ensuring all of the requisite technical expertise and experience is in place," another added.
One peer in the 23% that thought it was ‘not very important' to increase diversity said board member appointments "should be based on talent, experience and knowledge". Another stated that "anyone who is able to perform the role should be encouraged to apply", while a third said "it is far more important you have people that want to do the role".
Just 4% said better diversity was ‘very important' but agreed it was difficult to achieve.
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