Trustees warned on pensions governance issues

Finance | Ian Allsop | 7 May 2008

Charity and pension trustees need to be increasingly aware of the governance, conflicts of interests and trustee competency issues raised by recent changes in pensions legislation and regulation, according to a new report.

CFDG’s 2008 Charity Pension Maze identifies pensions as a significant area of risk management for charities. It concludes that the Pensions Act 2004, changes to the regulatory framework and the Pension Protection Fund have all made charity pension issues much more complicated.

“It has recently become apparent that economic investment and actuarial changes are all likely to increase the future cost of funding pension contributions and further exacerbate the difficulties many charities currently face,” it says.

It suggests that pensions need not get in the way of mergers but warns that it will take time to implement solutions, and probably increase costs. It also advises trustees to start planning ahead to work out what implications arise from the proposed introduction of personal pension accounts from 2012 onwards.

Christine Farnish, director of public policy and sustainability at Barclays, which sponsored the report, said: “Charities need to understand and manage a number of complex legislative and regulatory challenges on pensions. Even now, changes are being made to the Pensions Bill to give the pensions regulator greater powers. Today’s guide should prove an invaluable tool for charities and help them navigate their way through what can, at times, feel like a regulatory jungle.”

Directory: Charity Finance Directors' Group (CFDG)
Who's Who: Ian Allsop

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