EUROPE – The chairman of the European Federation for Retirement Provision, Alan Pickering, has called into question the 'Anglo-Saxon' system of trustees, saying trustees have “outlived their usefulness”.

Pickering, who is also a partner in consulting firm Watson Wyatt and the author of the 2002 report into the simplification of UK pensions, told a conference in London: “I refuse to defend any longer the Anglo-Saxon trust-based system. I really don’t think it has a future.” He cited the increasingly complex investment decisions being placed on trustees by government rules.

He argued that the UK government was trying to make lay trustees deal with too many complex issues.

“Pension schemes will become closer and closer to a contractual commitment,” he added. He foresaw more defined contribution set-ups that had nothing to do with trustees and employers. “I really do question the role of a trustee in that environment,” he said, adding: “I think trustees have outlived their usefulness.”

He reiterated his views that the state was the “natural provider of pensions”. “I’m arguing for the state to provide a reasonable level of income in retirement.” He pointed out that pension guarantees and security cost money. “The pension system far more expensive than it needs to be,” he said.

Pickering made the remarks, which he acknowledged amounted to “heresy”, at an international bond investor conference.

On the topic of asset allocation, Pickering said: “What worries me is that we are replacing the cult of the equity with the cult of the bond. Both have their true place.”

Pickering, the author of the “A Simpler Way to Better Pensions” report in 2002 and chairman of the Plumbing Industry Pension Scheme, is a former chairman of the National Association of Pension Funds.