Financial market volatility is exposing serious structural flaws in current DC strategies. Those responsible for investment governance need to understand and adopt appropriate risk assessment, sensitivity and management procedures.
The Myners’ Principles, established in 2001 and updated in October 2008, provide a framework for improving investment governance and decision-making. The Investment Governance Group (set up by the DWP and HMRC and chaired by the Pension’s Regulator) is building on Myners’ Principles, proposing a set of principles, guidance and accountabilities to apply to all DC schemes on a ‘comply or explain’ basis.
Governance is increasingly a theme that underpins each of the Pensions Regulator’s statutory objectives and all investment activity is now regulated by the Financial Services Authority.
Focus is required to address how investment options are selected, reviewed, amended and where required, replaced.