Pensions - Articles - Good governance is essential to protect pension savers

 The Investment Management Association (IMA) has submitted written evidence to the Work and Pensions Select Committee saying that now more than ever, good scheme governance is critical to ensure the success of auto-enrolment.

 Auto-enrolment will lead to an unprecedented rise in the number of investors with little investment experience or knowledge. It is imperative that these investors are protected by robust governance structures, supported when important decisions need to be made and given straightforward information.

 As part of this the IMA proposes a clear and consistent approach to charging and disclosure and an all-inclusive annual pension statement for all. Developing a statement which shows pension pots in their entirety, including both state and private provision, will help to give savers a realistic impression of how much they need to contribute to their pensions to achieve their desired outcome.

 Jonathan Lipkin, IMA Associate Director, Pensions and Research, said:

 "Automatic enrolment creates a huge opportunity to change positively the long-term savings culture in the UK. However, in ensuring that pension savers are well served, the industry collectively has a significant responsibility. In this respect, both disclosure and governance are critical ingredients.

 "Good governance means ensuring that decision making is effective, transparent, accountable and focused on member outcomes. The Investment Governance Group* have developed a DC governance framework which we would like to see used and developed further."