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LONDON-Trustees of U.K. employer-provided pension plans could find themselves in hot water if they don't step up their implementation of the requirements under the Pensions Act 1995, a pension specialist warned.
With less than two months to go before the law's April 6 compliance deadline, implementation of those rules is "patchy," said Peter Rowley, pensions partner at accounting firm Grant Thornton in London.
"It is clear that some schemes have a lot to do in the remaining time if they are to be sure of compliance," Mr. Rowley said last week as he unveiled a survey showing that more than a third of employer-sponsored pension plans have not put new procedures into place in at least one key area.
The Grant Thornton survey of 101 plans, each with more than (British pounds) 30 million ($48 million) in assets, showed that 38% had not consulted their participants about changes under the Act's member-nominated trustees provisions. These provisions state that at least one-third of a plan's trustees must come from the plan membership, though the majority of employer-provided pension programs already meet that standard.
Another major provision of the Act requires programs to introduce internal dispute resolution procedures between plan members and trustees. Mr. Rowley's survey showed that 36% of plans have not yet agreed on procedures, though this will be one of the major areas of scrutiny by the new regulator, the Occupational Pensions Regulatory Authority, which also will go into effect April 6.
Pension plans "will have to demonstrate a very clear complaints procedure," said a spokesman for the pension authority.
Fewer than half of the plans surveyed had issued a statement of investment principles, and most had made no changes to their pension advisers, though the new regulations shift the responsibility for selection of the advisers to the trustees from the employer.
Opra is taking a "pragmatic" view toward plans having all the necessary changes in place by April, said the spokesman, though plans that do not fulfill all the criteria at that point will have to prove they are aiming to do so. "We want to see determination on their part," the spokesman said.
Opra was established after the Maxwell pension scandal in which late media tycoon Robert Maxwell raided his companies' pension funds (BI, Oct. 11, 1993). The regulator will be able to impose penalties for non-compliance, ranging from fines of up to (British pounds) 50,000 ($80,000) to removing individuals as plan trustees. In serious cases, such as trustees blocking Opra investigations, the authority will bring criminal charges.