UK - The government should legislate for "a more appropriate governance structure" for pensions, says the president of the Society of Pensions Consultants.
Donald Duval told the National Association of Pension Funds’ annual conference in Glasgow that it did not seem "likely" in the immediate future. He said companies should "emancipate themselves" from unsatisfactory structures.
He told delegates that the current governance system "fails to protect scheme members" in the in the event of corporate insolvency and "exposes companies to large risks which they are legally prohibited from controlling".
In the course of the session - chaired by NAPF chief executive Christine Farnish - Duval made historical parallels between today's pension dilemmas and the cultural and moral dilemmas of the 16th and 17th centuries
Duval said that 17th century people freed themselves from prejudices such as witchcraft, magic and astrology to rule their life, in spite of science not providing all the answers to their sorrows and problems.
"Once people had discarded the old remedies, they had a tremendous incentives to find new scientific remedies that actually did work."
Speaking of the influence of the decline of magic he said: "The important lesson here is that if something is not working, however venerable and respected it might be, we should discard it, even if we have nothing to put in its place - indeed especially if we have nothing to put in place."
"The faster we discard our failures, the more effort can be put into developing the success of the future,” he argued.
He argued that occupational schemes had a role in social cohesion. There was a "bond" between the company today and the people who retired from it 20 years ago.
"If companies do not have that continuity of social function over time, then the appropriateness of a defined benefit scheme becomes questionable," he said.