Editorial: Take the weight

But, admittedly, less has been said about the burden this places on trustees in terms of learning to speak the regulatory language and reporting in kind.

This week’s intervention comes from the Pensions Management Institute – which knows a thing or two about educating the uninitiated – taking aim at the 31 quality features of the Pensions Regulator’s defined contribution code.

Illustration by Ben Jennings

“I have spoken to some lay trustees and they feel their role is becoming increasingly difficult, indeed almost impossible to fulfil,” reports PMI president Paul Couchman.

A regulator that did not make anyone’s life any harder would not be much of regulator at all, and the principle of improving quality is unquestionable.

The concern is that such measures just create extra work for those larger, better-run schemes that will bother to jump through the hoops, while some smaller, more frequently worse-run schemes will take as little notice as they have done before.

But at the same time, what would be the alternative? The PMI suggests simpler language, but I suspect it is the weight of the regulatory mass, rather than the particular difficulty of the ideas expressed, which is causing the problems.

I have heard particular concern for the work it is creating in defined benefit schemes that have offered additional voluntary contributions as a top-up for their members.

For schemes that are already wrapped in a suffocating mass of legislative rules and regulatory guidance – often created in the best interests of scheme members – and still facing a tough funding environment, paying out a load of consultancy fees to make sure AVCs meet every dot and cross of the code does seem a bit of a waste.

So, spare a thought for the burden on the trustee, and for the scheme as a whole, which is footing the bill for any advice needed.

All views, as always, are welcome.  

Ian Smith is editor of Pensions Expert. You can follow him on Twitter @iankmsmith and the team @pensions_expert.