Three-quarters of trustees in charge of UK hybrid schemes spend more time on the defined benefit (DB) side of the scheme than the defined contribution (DC) arrangements, according to a survey by law firm Baker Tilly.
The firm’s annual trustee report, which saw more than 100 trustees respond, also found that one-third of trustees viewed their risk management framework in need of improvement.
Baker Tilly noted in the survey’s introduction that the “continued lack of focus” on DC governance should be a matter of concern.
It said the admission that 75% of hybrid trustees focused more on DB than DC showed the Pensions Regulator’s campaign to focus trustees attention had not yet resulted in the desired results.
The remaining 25% of respondents said their time was split equally, while none of those surveyed said more time was spent on DC matters.
“Given that it is recognised by respondents that maladministration produces the highest risk of claims, this lack of progress should be of concern, particularly in hybrid arrangement,” the report says.
“The survey also highlights the fact risk management could be considered in a more proactive way in trustee meetings and also indicates that the consideration of the risk of fraud being perpetrated against pension schemes remains a low priority on the trustee agenda.”
Meanwhile, campaign group ShareAction has alleged that a review of DC legacy scheme arrangements will fail to bring about the change needed within the insurance industry.
Yesterday’s interim report by the Independent Project Board – which includes representatives of industry bodies, the UK regulator and the government – offered an update as to how £30bn (€37bn) of assets held within pre-2001 legacy contract pension arrangements could offer savers a better deal.
The figure was identified by a previous report completed by the Office of Fair Trading (OFT), since folded into the Competition and Markets Authority following a regulatory restructure.
ShareAction’s chief executive Catherine Howarth said the government and the Association of British Insurers should “urgently clarify” how those saving into the legacy funds would be helped.
The group expressed concern that the proposed independent governance committees (IGCs) – meant as a de-facto trustee board within contract arrangements – would only be offered the ability to advise rather than direct the provider.
“Savers have yet again been left stranded and unprotected by this feeble and conflicted review,” she added.
“Leaving reform of legacy schemes to independent governance committees inspires very little confidence when there is, as yet, no framework for IGCs nor obligation for pension providers to follow their guidance.
“The eventual report coming out of this review process will fail to bring about much-needed changes to protect British savers.”