Financial crisis
The financial crisis has had a deep impact on various areas. Pension funds worldwide, too, have been affected by the crash, resulting in one of the hardest periods for pension fund investment on record.
The issues faced by pension funds due to the financial crisis are challenging and very taxing for pension fund trustees who apply themselves to the challenges.
In the United Kingdom the debate following the 2002 Myners report ( Institutional Investment in the United Kingdom: A Review, by Paul Myners) on pension fund governance comes sharper into focus. The Investment Governance Group, for example, published a consultation paper with a view on strengthening the decision making process and pension fund governance.
In solving problems relevant to the investment responsibilities of pension funds trustees the call to appoint investment professionals to boards of pension fund trustees has grown louder. The duties of a pension fund trustee are, however, quite challenging. Pension fund trustees take on considerable potential liabilities.
Expert board members
Both in the United Kingdom and in Europe the increasing demands on pension fund trustees, the rapidly changing and more complex legislative environment surrounding pensions and funding problems are leading to a phasing out of volunteer trustees in favour of expert independent trustees with all the requisite legal, actuarial and investment skill.
Further reading
Consult Myners Response – pu632
