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&#39Trustees are failing to update their skills&#39

Only 55 per cent of pension scheme trustee boards have reviewed their knowledge of pensions and investment and 65 per cent have no effective governance policy, according to a new study by PricewaterhouseCoopers.

The survey of 66 chairmen of major UK pension schemes reveals that many UK pension scheme trustees lack the necessary skills and resources to implement effective corporate governance.

It shows that 85 per cent of trustee boards do not have individual governance objectives and only 46 per cent assess the performance of advisers and delegates.

The firm says most pension scheme trustees will have to improve their understanding of pensions and investments to comply with the provisions of the Pensions Bill by the time it takes effect in April 2005. It says schemes have moved to implement the principles of improved scheme governance recommended by the Myners report but will need to go further to implement the more onerous requirements which are contained in the Pensions Bill.

Schemes will have to develop principles for dealing with conflicts of interest between retired and non-retired members and set up structures to measure the performance and abilities of scheme trustees.

PWC national pensions audit practice chairman Andrew Evans says: “The results of our survey suggest that trustee boards are keen to enhance governance but may have lulled themselves into a false sense of security by making moves to comply with Myners.

“An ad hoc approach will leave trustees open to challenge. Under the new requirements of the Pensions Bill, trustees will need to be able to demonstrate conclusively that they are in fact doing the right thing.”

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