The National Association of Pension Funds (NAPF) has published its review of the implementation of the Myners’ principles (the Principles): Institutional Investment in the UK: six years on. It follows on from the publication of the Principles in 2001 and the Treasury’s 2004 review. The NAPF was tasked with assessing the degree to which pension fund trustees were complying with the Principles, whether the perceived weaknesses identified in the Treasury’s review had been addressed, in particular the areas of scheme governance and the skill and expertise of trustees, and to make recommendations for improvement. The report makes the following recommendations:
- voluntarism should remain at the heart of the Principles, reinforced by a strengthened “comply or explain” approach to reporting - the proposal for compulsory independent reviews for schemes is rejected;
- the current Principles should be replaced with six higher-level Principles (effective decision making, clear objectives, risk and liabilities, performance assessment, responsible ownership and transparency and reporting) for today’s pensions environment;
- high level principles should be supplemented by supporting guidance and toolkits to give trustees practical support;
- new approaches are needed to help smaller schemes comply with the Principles, including the options available to introduce scale economies to small schemes;
- the Pensions Regulator (TPR) should work with pension schemes, trustees and providers to take forward its proposals in relation to the governance of money purchase schemes;
- the Principles should be co-owned by TPR and the pensions industry and not owned by the Treasury as they are currently;
- trustees should periodically undertake formal assessments of their own performance and that of the board; and
- a further, targeted review should take place in three years, focusing specifically on those areas of under-compliance identified in this review.
These findings have been generally welcomed by the Government and the pensions industry.
View the report
View our in-depth briefing paper