Adviser > Investment for Advisers > Updates > Investment governance guidelines for DC pensions
Investment governance guidelines for DC pensions
Are you making the most of this opportunity?
In November 2010 the Investment Governance Group (IGG) of senior figures in the pensions industry, chaired by the Pensions Regulator, issued two papers on investment governance:
- a set of principles for investment governance of work-based DC pension schemes
- good practice guide for employers.
These aim to establish the accepted code of best practice for DC scheme governance and include a template for employers and trustees to create their governance plan.
This creates a great opportunity for you to talk with your employers and trustees about how you can help them to meet these guidelines.
Key responsibilities
The best practice principles are principally targeted at trustees and employers and are quite extensive and potentially time consuming. They include recommendations that employers and trustees:
Our Governed Range can help you meet many of the IGG's recommendations:
Appropriate default options
Scottish Life Governed Range was voted Corporate Adviser Ultimate Default Fund 2010.
Ongoing governance
Our Investment Advisory Committee (IAC) monitors and adjusts our Governed Portfolio asset allocations and all our funds, with an extra layer of governance on our Matrix funds.
Regular communication
The minutes of the IAC meetings are available to paste into reports for members.
- Make available sufficient time and resources for making investment governance decisions.
- Ensure the default strategy and investment options accommodate the various risk profiles and time horizons of scheme members.
- Consider a substantial list of factors when selecting funds
- Produce and apply guidelines for the selection and removal of funds
- Spend time reviewing and managing the default strategy and investment options
- Communicate effectively with scheme members about their investment options.
An opportunity for you
The IGG have agreed that many of these responsibilities can be delegated to an adviser or provider. This gives you an opportunity to discuss the need for a strong governance framework with the employers and trustees you deal with and talk to them about how you can help them meet these guidelines. And our investment options can help you build a solution that meets the IGG's standards.
Find out more
To find more about how our investment options can help meet many of the IGG's requirements, download our brief guide or get in touch with your usual usual Scottish Life contact.
Reference
- Principles for investment governance of work-based DC pension schemes
- Good practice guide for employers
For professional advisers only
