Angela Rayner – 2016 Parliamentary Question to the Department for Work and Pensions

The below Parliamentary question was asked by Angela Rayner on 2016-02-22.

To ask the Secretary of State for Work and Pensions, what assessment he has made of the potential merits of providing a fiduciary duty for the governance committees of pension funds to their members.

Justin Tomlinson

Under Financial Conduct Authority (FCA) rules introduced in April 2015, independent governance committees (IGCs) have a clear duty to challenge providers on the value for money of their workplace pension schemes, acting in members’ interests, raising concerns and making recommendations as appropriate. The provider must also make arrangements for member views to be directly represented to the IGC.

The provider’s board has a “comply or explain” duty in response to recommendations from the IGC and if the IGC is not content with the board’s response it can escalate to the FCA, to members of the scheme and to the public. When coupled with the IGC’s duty to act in members’ interests, this provides a practical and direct way of ensuring good member outcomes.