The Pensions Regulator has published a consultation document on guidance relating to conflicts of interest.
The draft guidance is designed to help trustees of occupational pension schemes assess the adequacy of governance arrangements they put in place to manage conflicts of interest, which may arise when a personal interest or duty to another party comes into conflict with their duty as a trustee to the scheme.
Such conflicts of interest can lead to discussions or decisions that are not in the best interests of the beneficiaries. They can also affect professional advisers and consultants as well as pensions managers running a scheme.
The key principles covered in the guidance are understanding the importance of conflicts of interest, identifying conflicts of interest, managing and avoiding conflicts and managing adviser conflicts.
Tony Hobman, chief executive of the Pensions Regulator, said: “Robust processes to identify, monitor and manage conflicts are integral to a well governed scheme. Effective governance of conflict of interest by trustees is critical to helping us achieve our objectives of protecting members’ benefits and promoting good scheme administration.”
Responses to the consultation should be submitted by 30 May 2008.