The three most important issues are the responsibilities of trustees and their advisers, the possibility of a pensions regulator and a compensation scheme.
Peter Lilley, Secretary for Social Security, has already backtracked on the Goode committee on pension law reform's call for a super-regulator to monitor every scheme and investigate complaints. Instead we are likely to be treated to an upgraded version of the existing Occupational Pensions Board, with much of the supervisory work in effect sub-contracted to the insurance and investment companies that manage schemes.
This is acceptable provided that the responsibilities of trustees and the actuaries who advise them are tightened, and that the compensation scheme is fair and effective.
Actuaries and trustees, for example, could be given the same responsibility to blow the whistle whenever they suspect malpractice, as auditors have been grudgingly forced to accept in the banking business. The Government should also drop its opposition to a mandatory one-third or more of trustees being appointed from scheme members.
Goode recommended a compensation scheme limited to cases of fraud, theft and misappropriation, and covering 90 per cent of a scheme's losses - funded by pension schemes in general. Anything less than that, and Mr Lilley will have failed.Reuse content