U.K. Schemes Do Not Use Governance Policy

Approximately 54% of U.K. pension trustee boards do not use a formal governance policy as a framework for decision-making despite the increased scrutiny placed on pension fund governance, according to a new study by PricewaterhouseCoopers. However, during the last two years there has been a significant emphasis on enhancements to governance with 70% of trustee boards making changes. More than half of trustee boards now have business plans, though some chairmen have expressed considerable doubt about the effectiveness of their plans. This is because business planning is still comparatively new for many trustees and its form and content varies considerably, said Andrew Evans, chairman of the national pensions audit practice at PricewaterhouseCoopers.

As part of PricewaterhouseCoopers' second study on pension scheme governance, 81 chairmen of large U.K. pension schemes took part in an in-depth survey to collect key trends and issues facing trustees. Around 45% of survey respondents chaired schemes with over GBP1 billion of assets.

The study clearly shows that governance is listed high on trustees' agendas. "They [trustees] were well aware of the importance of good governance, it demonstrates the concrete steps that they have been taking over the last two years to improve governance," said Evans. The results of the survey are encouraging but "there is still some way to go and effective governance of U.K. pension schemes will be a continually evolving process," he concluded.