UK – The NAPF has been told by a leading pension consultant that the increasing level of trustee departures from pension funds is “a disaster”.
Mercer European partner Matthew Demwell told the National Association of Pension Funds’ autumn conference that he was not sure that it could be fully prevented.
He qualified this by saying that trustees were not leaving in droves, but that some firms were finding it increasingly difficult to fill vacancies with good member trustees.
“I think the government is hoping it will be okay in the end. Only time will tell,” he told IPE. “The subject is a difficult and thorny one.”
Apart from it being a “bad news subject” in the press, the statutory requirements from April 2006 for greater trustee knowledge is also potentially onerous.
Trustees are required to hit the ground running, and the increased responsibilities and knowledge requirements may put people off due to a back-to-school feel, said Demwell.
He added: “Trustees are also increasingly aware of the sanctions, penalties and personal fines for trustees.
“It’s scary to be put in a position where one may be subject to this.”
However, Demwell stated that the majority of people acting as scheme trustees were committed, qualified and serious about their responsibilities.
“There is a strong sense of duty. It is a job that has to be done, and they are prepared to put their heads above the parapet,” he explained.
He stipulated that the pensions industry should give as much support to trustees as possible, including the removal of unnecessary official barriers.
Pensions Regulator chief executive Tony Hobman said that while some trustees were making the decision to leave, many others were “enthused and invigorated” to play an important and challenging role in the pensions arena.
Pension reforms minister Stephen Timms – who also addressed the conference - stated there was “a need to raise the status and levels of respect for trustees”.
The NAPF also released the results of its latest Annual Survey today, showing that UK workplace pension schemes were working hard to contain costs and maintain employee benefits.
However, pension providers remain concerned about deficits, PPF levies, regulations and running costs.
“In the face of these pressures, 80 respondents (24%) expect to close their scheme to new entrants and/or future accruals in the next five years,” said an NAPF press statement released today.
Elsewhere, the Financial Times reported that the Pensions Commission will propose raising the retirement age to 67 from 65 – although the Commission said the report was speculation.
No comments yet