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Supervisors 'should examine' pension funds

Wednesday 12 January 2011 - by Will Henley

National supervisors should have the power to take directors and governing boards of pension funds to task over poor risk management and corporate governance, according to a new report.

The joint report by the International Organisation of Pension Supervisors and the OECD, published on Tuesday, claims that risk assessments of individual pension funds should be "central" to the supervisory role of pensions regulators.

"Pension regulatory or supervisory authorit[ies] should have the power to evaluate the directors and governing boards of pension funds or plans, and to determine that appropriate corporate governance, risk management and internal controls and a code of conduct will be in place," the report recommends.

"In those instances where supervisors determine that the risk management system is not adequate or effective for the organisation's specific risk profile, they should take appropriate action.

"This would involve communicating their concerns to the governing board and monitoring what action is taken to improve risk management."


The report, 'Good Practices for Pension Funds' Risk Management Systems', is intended to provide guidance for pension fund regulators and supervisors to check risk management systems at pension funds.


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