GLOBAL - The Chartered Financial Analysts Institute is seeking to persuade all individuals who sit on the governing bodies of pension funds to improve governance by adhering to a global code of conduct for pension schemes.

"The Code", as it is known for short, was launched at the CFA's Netherlands conference in the hope it will help pension scheme trustees and other individuals to "manage their ethical responsibilities".

While the code is voluntary, it is largely based on existing voluntary and regulatory codes of conduct of established pensions regimes and the "10 fundamental ethical responsibilities" are designed as high-level, principles-based "responsibilities" so it may be applied to provide best practice, regardless of where the pension scheme is managedand encourage pension plans to establish ethical frameworks for governing board members, according to CFA officials.

More specifically, officials say with US$25trn (€15.89trn) held in global institutional pension fund assets and the increasing pressure to secure a good financial future for pension members, the pensions and investment market needs a strong governance framework to cope with the growing burden on trustees.

Under the new code of conduct, pension trustees must:

Act in good faith and in the best interest of the scheme participants and beneficiaries; Act with prudence and reasonable care; Act with skill, competence, and diligence; Maintain independence and objectivity by avoiding conflicts of interest, refraining from self-dealing, and refusing any gift which could reasonably affect their loyalty; Abide by all applicable laws, rules, and regulations, including the terms of the scheme documents; Deal fairly, objectively, and impartially with all participants and beneficiaries; Take actions that are consistent with the established mission of the scheme and the policies that support that mission; Review on a regular basis the efficiency and effectiveness of the scheme's success in meeting its goals, including assessing the performance and actions of scheme service providers; Maintain confidentiality of scheme, participant, and beneficiary information, and Communicate with participants, beneficiaries, and supervisory authorities in a timely, accurate, and transparent manner.

The code was created by a working group at the CFA Institute Centre, which included representatives of the US Council of Institutional Investors, The OECD, the UK National Association of Pension Funds (NAPF), Swiss Association of Pension Funds, Hong Kong Retirement Schemes Association and the Dutch Association of Industry-wide Pension Funds.

It first saw light in July 2007 and public feedback was invited, before being deemed suitable for rollout.

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