UK - The UK government has launched a review of the corporate governance principles applied to UK pension funds and trustees, which adds to the guidance review conducted last year by the National Association of Pension Funds (NAPF) concluding trustee standards had improved.

A joint initiative has been unveiled by the ministry of finance, the department for work and pensions and The Pensions Regulator suggesting the new ‘Myners-style' framework will depend less on rules and more on principles - much in line with other financial-related regulatory regimes in the UK.

A voluntary framework suggesting how pension fund trustees should operate was first introduced in March 2000, following a review of the institutional investment market by Paul Myners, then chairman of Gartmore, the investment house, and now chairman of the Personal Accounts Delivery Authority.

But this latest development will mean the industry plays a larger role in setting the framework, as a joint Government-industry Investment Governance Group is being created "to co-own the principles, monitor their effectiveness and the quality of reporting against them, and make recommendations for improvements to investment decision-making and governance".

The updated principles are said to be designed to provide more flexibility for different types of schemes in terms of their size, financial position and strategy, according to the group's consultation paper, and will provide "a suitable starting point for developing specific frameworks for smaller schemes, defined contribution schemes and Local Government Pension Schemes".

The 56-page consultation document has taken all of the proposals set out last year by the NAPF and added to its principles' best practice guidance where the government authorities feel it improves disclosure, transparency and knowledge.

In the main, the consultation suggests the government believes NAPF guidance should be applied as a requirement within the "voluntary set of 'comply or explain' principles" - whereas the NAPF had suggested actions to be taken by trustees - and widened where appropriate to assess the impact of changes on all "stakeholders" of the pension fund where appropriate.

Responses to the consultation must be submitted by 23 June 2008.

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