U.K. actuaries group warns onerous retirement plan rules endanger trustee model

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The current wave of U.K. legislative changes to retirement plan rules is pushing up costs and discouraging individuals from becoming trustees, warned the U.K’s Association of Consulting Actuaries on Monday.

According to a survey by the association, 76% of U.K. employers expect that their plan trustees will consider resigning.

Almost 9 in 10 U.K. employers expect to struggle to find replacement trustees due to the growing regulatory burden, the survey also found.

Meanwhile, governance costs increased by more than 5% in the past year alone, according to the ACA.

Trustees’ responsibilities have increased to incorporate oversight of climate-change reporting regulations, determining value for money in defined contribution plans, preventing fraud in participants retirement accounts as well as equalization of retirement benefits between male and female participants, among other rules.

“The pensions industry is creaking under the weight of too much legislative change being pushed through at the same time. A wide-scale capacity crunch is already happening and set to get worse as dashboards, GMP (guaranteed minimum pension) equalization, simple statements, scam prevention and climate change are all competing for space, alongside fundamental changes to DB funding regulation and DC value for money,” said Patrick Bloomfield, ACA chairman, in a news release accompanying the survey.

“The pace of change in pensions is pushing up costs and discouraging people from being trustees. Unless steps are taken to manage the pressures being put on schemes, we risk killing off the U.K.’s traditional model of trusteeship,” Mr. Bloomfield added.

The ACA also found that 19% of employers say they are considering sole trusteeship to simplify governance, while at the same time more than half expect governance costs to increase by more than 5% per year.