Increasing role ahead for outside pension director
The role of professional pension scheme directors is likely to increase in future. There are four main reasons for believing this:
q Changing regulation of pension funds Regulation of pension funds has become more onerous for pension fund directors over time almost everywhere. They find themselves with more work and more complex matters to grapple with accountability rising at the same time. Therefore, there will be an increasing demand for trustee expertise and experience on the boards to manage the many facets of compliance.
q Increasing complexity of investments Increasing complexity seems a matter of fact for most aspects of pension management. New classes of investment instruments, such as derivatives, hedge funds, private equity, are just examples for this in a fast changing market environment.
q European pension reforms Pension reforms are under way in all European countries, the general trend being towards funded pension schemes. New vehicles and principles introduced will require full dedication and there will be scope for cross-fertilisation using professional fiduciaries.
q Developments of cross-border pension plans More and more international companies are working on cross-border pension schemes or on pan-European plans. While pensions regulation is still very much a national affair, these moves are to be seen against the background of global corporate strategies, increasing labour mobility within Europe, and the first steps towards a more open and integrated European pension system as envisaged by the European Commission.