Finmeccanica takes charge of pensions governance

Defence organisation Finmeccanica’s FuturePlanner pension scheme, which was set up in 2007, has 2,500 members, with administration provided by Aon Hewitt and investment services provided by P-Solve on a fiduciary basis through Skandia as the investment platform.

The scheme currently has five trustees, two of whom are nominated by members through Finmeccanica’s pension consultative committees. The trustees meet at least quarterly, receive regular administration and management reports and check the scheme’s progress against an annual business plan.

Mike Nixon, head of pensions at Finmeccanica, says: “We support The Pensions Regulator’s efforts because we believe good governance can make a positive difference to outcomes, particularly for members in default options.

“We have found it helpful to share ideas and experiences across all our schemes and apply a consistent standard of governance for both defined contribution (DC) and defined benefit (DB) assets.

“However, I am a little concerned at the volume of current governance initiatives and the risk of overwhelmed fiduciaries reverting to box-ticking rather than considered responses.”

Finmeccanica is also the ultimate sponsor of the Selex and AgustaWestland pension schemes which, last year, launched a series of four blended funds as part of an overhaul of their additional voluntary contribution (AVC) investment options, to smooth out volatility for members. “We are giving them the kind of skillset that has also been deployed for the main assets,” says Nixon.

Although a governance committee will become a requirement for pension providers under the Association of British Insurers’ code, Nixon believes there are good reasons for employers to run the committee. “Pensions are an expensive and  important employee benefit,” he says. “It makes sense to me for employers to make the most of their investment by ensuring the scheme is well governed and properly appreciated by the members.”