The level of skills alone required to manage the range of fund regulations makes finding the right trustees a challenge. Above all, a huge focus for regulators is to improve trustee knowledge and awareness. Accreditations, self-assessments, formal training programmes within the annual trustee cycle are all becoming the norm. Education is the watchword.
The proposals range from incorporating a defined contribution element to reducing post-retirement benefits, to raising the retirement age for future participants.
The latter has led to quite a bit of controversy when offered as a remedy for inadequate public finances. Regularly, the media promote stories of passionate public hearings and large-scale demonstrations both for and against the idea. In the US, where fierce debate focuses on budgetary shortfalls, 90 per cent of state retirement systems reporting actuarial data in 2011 were designated as underfunded. Raising the retirement age might provide some relief to state budgets, even as the ranks of retirees increase, without resorting to the most dreaded option of all – raising taxes.
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