LONDON (13 May 2016) – Aon plc (NYSE:AON), has responded to the Pensions Regulator’s consultation on the guides to support Code of Practice 13 (the DC code), saying that while they are helpful they also raise implications for, among other issues, the costs of compliance.
Madalena Cain, principal consultant at Aon Hewitt, said:
“We are pleased in principle with the aim and intentions of the ‘How to’ guides and particularly with the reduced length of the Code itself. We support the Regulator’s aim of improving the governance of DC schemes but we believe it may have increased the compliance costs of doing so with these publications. Costs will further increase if, as indicated, the How to Guides are reviewed on a more frequent basis.
“We also have some concerns about how the Regulator is stretching what is legally required by the use of the phrase ‘The Regulator expects’ - which litters the Code. This is exacerbated by the ‘How to’ guides which do not distinguish between what trustees must do for legal compliance, what they could do as part of reasonable proportionate practice - and what is the gold standard best practice. We believe this approach may lead to ‘perfect being the enemy of good’.”
Madalena Cain continued:
“There may also be issues for DB trustees who only have AVCs, as the ‘How to’ guides do not currently support them. This group of trustees may be left wondering if they have to do everything as if their AVCs are a DC scheme or if they can interpret this guidance proportionately and do a lot less."
For further information please contact:
Colin Mayes Anelia Fikiina
Aon Hewitt CNC
01372 733689 020 3219 8887
Notes to Editors
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