Pensions Ombudsman David Laverick is calling for stronger regulation of the actions of independent t...
Pensions Ombudsman David Laverick is calling for stronger regulation of the actions of independent trustees, with the hope that it would make trustees more responsible for the consequences of their actions.
Speaking to the Society of Pensions Consultants this week, Laverick applauds the development of an Independent Trustee Group of the Pensions Management Institute.
But, he says, there is yet some way to go before a self-regulated profession will appear.
Therefore, Laverick argues, there is still "a powerful case" for regulation by government.
So far, "there is a lack of professional regulation", he says, especially as professional trustees are given an "unreasonable degree" of protection by different exemption clauses commonly found in pension trust documents, which to a large extent pardon trustees from the financial consequences of their actions.
This has left scheme members with less protection than the law should to be providing, Laverick says.
On top of of his call for tightening the belt for trustees, Laverick also doubts whether trustees should continue to 'suffer' the delicate problem of having to "scratch their heads over whether to pay death benefits to spouses, children, mistresses or toy-boys".
He says that he "would be happy to scrap the whole idea" even if it meant the money falls into the deceased's estate and, those who were well-off become liable to inheritance tax.
Talking about employee protection, Laverick also praises the Pension Protection fund proposed by the government and says that it would meet an "urgent" need to provide a greater degree of confidence in the security of occupational pension schemes.
Airing his view, Laverick says: "It is unacceptable for a scheme member to work for nearly 40 years having a part of his pay deducted and set aside to provide a pension only for that pension to disappear in a puff of liquidated dust."
The chairman discusses his surprise holiday job
Three months on
Regulator has stepped in
More than £70m spent on project