Workers 'face failing pensions schemes'

05-09-2006

A "significant minority" of businesses are failing to run their pension schemes properly, it has been claimed.

The Pensions Regulator (PR), a regulatory body for work-based pensions in the UK, made the conclusion in a major survey of the nation's pension schemes.

Publishing its findings today, the PR found a clear link existed between the ability to manage effectively and the reliability of each firm's pension arrangements.

On the whole, larger schemes were found to be more effectively governed, because they necessarily require a greater degree of organised administration, while scheme trustees were generally judged to be performing well.

But 70 per cent of the 1,200 pension schemes covered did not have provision to manage conflict of interest issues, 37 per cent failed to review sponsoring employers' credit ratings and 20 per cent of administrated pensions schemes lacked a "service level agreement with their administrator".

"We have carried out a lot of work on helping to improve the way pension schemes are run but it is clear from this survey that we must not take our foot off the pedal," Pensions Regulator chief executive Tony Hobman said.

"While the survey showed that many schemes are well governed it identified areas where we need to maintain our efforts to help schemes and their trustees plug the gaps in important areas of good practice."

A report published last month by the Association of Consulting Actuaries found that time management and cost concerns were preventing many businesses from managing their pension schemes in an efficient and effective manner.


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