Paul Myners, head of a U.K.-government-backed study of British institutional investment, said mandatory funding rules for U.K. pension plans should be scrapped, the appointment of independent custodians by plan sponsors should be mandatory, and laws that prevent pension plans from investing in limited partnerships should be changed.
In a letter to U.K. Chancellor of the Exchequer Gordon Brown, Mr. Myners, chairman of Gartmore Investment Management, said the minimum funding requirement should be eliminated because it provides insufficient protection for members of defined benefit plans and distorts allocations. He suggested the MFR be replaced by a system in which trustees and actuaries disclose and justify their investment allocation decisions.
Consultation between the government and the investment industry on the future of the MFR will continue until the end of January.
