COMMENT: THE GOODE REPORT
| DOI | https://doi.org/10.1108/eb024795 |
| Date | 01 March 1993 |
| Published date | 01 March 1993 |
| Pages | 77-82 |
| Author | DEBBIE HARRISON |
| Subject Matter | Accounting & finance |
COMMENT: THE GOODE REPORT
Received: 16th November, 1993
DEBBIE HARRISON
DEBBIE HARRISON
IS
A FREELANCE PENSIONS JOURNALIST AND A
REGULAR CONTRIBUTOR TO THE FINANCIAL
TIMES AND PENSIONS MANAGEMENT. SHE IS
EDITOR OK TRUSTEE MAGAZINE AND AUTHOR
OF
SEVERAL FT BOOKS ON PENSIONS AND
INVESTMENT.
The main recommendation of the
Report of the Pension Law Review
Committee1 is that trust law will
continue to provide the basic struc-
ture for occupational pensions in the
UK but it will be strengthened by a
pensions act administered by a pen-
sions regulator. The Report also pro-
poses minimum solvency rules and,
where a fund does fail, a compensa-
tion scheme to cover fraud, theft and
other misappropriations. In addition,
it calls for the role of trustees to be
enhanced and for scheme members
to have a legal right to representa-
tion on the board and greater access
to information.
On the whole the report has been
greeted with approval and, perhaps,
even a sigh of relief by the pensions
industry. However, experts have
avoided concern over the more
demanding role of trustees which
are not backed by any call in the
report for compulsory training or,
for larger schemes, a requirement
for an independent or professional
trustee.
Actuaries have expressed doubts
about the levels of minimum sol-
vency required which many believe
would not be adequate in them-
selves and would create long-term
funding problems by triggering a
switch from equities into bonds to
enable funds to match liabilities with
cash equivalents.
Most pensions organisations,
including the National Association
of Pension Funds (NAPF), have been
disappointed that the report did not
recommend a statutory requirement
for an independent custodian to
safeguard the assets of a fund. There
has also been concern about the
proposal to impose the post-1989
tax and benefits regime on most pre-
1989 members.
It is unfortunate that the report
said very little on the investment of
77
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