Only one in five Spanish trustees has good financial knowledge - Mercer

Only 20% of the trustees of second pillar pension schemes in Spain consider that they have a good level of financial knowledge.

This is one of the key findings of a recent survey carried out by Mercer’s Spanish office into corporate governance among second pillar pension schemes—the first of its kind in Spain.

“This is alarming,” said Rafel Martinez, managing director of Mercer’s office in Barcelona. “I expected the percentage to be closer to 80%. This means that training is urgently required for trustees.”

Of those surveyed, which account for 60% of the total funds invested in second pillar schemes, 71% considered themselves to be in need of training. The main knowledge gap is in investment expertise and the legal matters governing pension funds, with 95% and 84% respectively identifying these as training needs.

Furthermore, only 20% of the corporate schemes had clearly defined responsibilities for trustees, fund managers and consultants concerning matters such as asset allocation and performance assessment. “Spain is a young market and efforts need to be made to improve corporate governance,” said Martinez.

The survey also found that only 25% of sponsoring companies have established a formal communication plan regarding the pension plan. Fortunately, 92% considered that communication with members of the scheme was of key importance.

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