Poor scrutiny risks hurting pension pots

Tim Wallace
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MILLIONS of workers risk putting their money in poorly governed pension pots, with little oversight and unsustainable returns, according to research out today.

While trust-based pension schemes have trustees to hold fund managers to account, FairPensions claims insurance firms’ contract-based pensions “often fail to perform this role.”

FairPensions studied the 10 largest contract-based pension providers in the UK and found only one insurance firm signed up to the UK Stewardship Code – a voluntary arrangement designed to improve the relationship between investors and firms, boosting returns.

“The code was issued in 2010 as a response to the financial crises and in acknowledgement that pension providers had paid insufficient attention to the governance failings and financial risks being taken at banks, most notably RBS,” said FairPensions’ Catherine Howarth.

“The poor oversight of banks by asset managers cost savers billions.”