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Consumer-friendly Farnish

The British pension fund industry is besieged.

A bear market, tighter government scrutiny and a new accounting standard that requires companies to include pension surpluses and deficits in operating earnings have created the toughest environment in years. Employees, whose savings are affected by the changes, will have to play a more active role in their own retirement planning.

Recognizing the challenge, the National Association of Pension Funds, the U.K. industry's trade body, has reached out to a vocal consumer advocate to become its next director general. Christine Farnish, who takes over the post in July, spent four years as consumer director of Britain's Financial Services Authority. She made the FSA the first regulator to post tables comparing pension policies, unit trust savings plans and other investment options on its Web site; last year she championed the introduction of personal finance material into the national curriculum for primary and secondary students.

Farnish, 52, says Britain's investment industry needs to offer advice in a simpler, clearer fashion to encourage consumers to save more for their retirement. And even as personal retirement planning grows, she believes that government policy should preserve and enhance employer-run pension plans. "Putting all the responsibility on individuals to take all of these huge decisions themselves is asking quite a lot," she says. "The only reason you have pensions is because consumers need this product when they retire. People often forget that."