UK - The UK Pensions Regulator's draft guidance on transfer incentive exercises may create unrealistically high expectations of trustees, Mercer has warned.
The consultancy said the watchdog's guiding principles were sound, but that the tone of its guidance could cause "undue trustee negativity".
It also argued that trustees lacked sufficient powers to police transfer incentives.
In its draft guidance, TPR proposed that trustees should assume that offers to enhance pension transfer values were not in the best interests of members.
It also said it wanted trustees to become "actively involved" in any transfer incentive or other benefit modification exercise.
Eleanor Dowling, principal at Mercer, said TPR's draft guidance had thus created a dilemma.
"It is the employer or its corporate group that sets the terms of the incentive offer made to members," she said.
"Trustees are in no position to assess whether an exercise is in members' best interests.
"At best, trustees can only assess whether the manner of operating each exercise meets a reasonable standard, given its particular circumstances."
Mercer said it was concerned the regulator would undermine trustees' effectiveness if it imposed expectations in areas where trustees had no control.