STEPHEN CRANSTON: Pension pot protection
Default regulations for pension funds go live. Under the regulations, several defaults will be introduced by trustees
After several years of back and forth between government and the service providers, the default regulations for pension funds will go live on Friday September 1. As few people are qualified to make decisions about where to invest their pension pots it makes sense to introduce defaults. They can be suitable for the large majority of fund members. And it is not as if the financial advisory fraternity is equipped to advise all members — right now it is interested only in the top executives. Under the new regulations there will be several defaults that trustees will be expected to introduce. In the case of those of us moving into umbrella funds, it is now up to the professional trustees of the overarching fund to make these decisions. They have the right knowledge to do so, but they will be conflicted. It will be a dilemma for, say, the Old Mutual, Sanlam and Liberty umbrellas whether they should favour the asset managers and risk providers in their stable.There will be a default option...
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