Effective Pension Fund Governance and Regulations

By undergoing this Effective Pension Fund Governance and Regulations course, you will gain a broader perspective to pension and pension governance and regulation, and will thus be more capable and confident of driving changes for the betterment of pension schemes and plans.

All participants will also benefit in the following ways:

• Increased understanding and knowledge of pension plans and pension governance and regulation
• Greater ability and expertise to closely review existing pension schemes of one’s organisation, identify gaps and correct them
• More awareness of universal standards and policies related to pension and replication of these in one’s organisation to ensure compliance and adherence
• Increased skills and knowledge to suggest changes to existing plans from the viewpoint of enhancement or devise new plans for the benefit of employees
• Greater abilities and confidence to handle change related to pension and pension policies in the organisation
• Increased confidence and broadened perspective to foresee and pre-empt challenges and risks to effective pension governance and regulation and address these well in time
• Increased capability and confidence to play a pivotal role in pension scheme management, governance and regulation in one’s organisation, thus demonstrating one’s talent, skill and preparedness to undertake additional roles and responsibilities for career growth and progression
• A sense of pride and satisfaction in helping one’s organisation assume competitive advantage as an employer and in devising the best plans and policies for the benefit of employees

COURSE CONTENT

Overview of Pension, Pension Governance and Pension Regulation

• Definition of pension
• Importance of pension governance
• Importance of pension regulation
• Types of pensions
  • Defined benefit pension
  • Defined contribution pension

Factors Determining Defined Benefit Pension

• Final salary at retirement
• Tenure of employment with the employer
• Accrual rate

Factors Determining Defined Contribution Pension

• Money paid by the employee into a pension
• Money paid by an employer into a pension
• Tax relief received by the employee
• Performance of employee investments

Benefits of Saving into Pension

• Employer contribution
• Tax relief
• No inheritance tax
• Diversified, well-managed investment portfolio

Possible Recipients of Public Pension Schemes

• Civil servants
• The judiciary
• Local government workers
• Teachers
• Health service workers
• Fire and rescue workers
• Members of the police forces
• Members of the armed forces

Potential Risks to Pension Funds

• Financial crises
• Dishonest employer and pension managers
• Lack of financial literacy of employees

Objectives of Pension Fund Regulation

• Rule and standard creation to protect against theft
• Ethical standard creation for pension managers
• Supervision of performance and activities of pension managers
• Penalty issuance on offence or non-adherence to rules
• Representation of the voice of individual workers to ensure pension security

Focus Areas for Regulation in Case of Pension Management by Agencies

• Risk aversion
• Outcome uncertainty
• Goal conflict
• Task programmability
• Outcome measurability
• Length/tenure of agent–organisation association

Stakeholders of Public Pension Funds

• Plan participants
  • active members/current contributors
  • retired member/current recipients
  • survivors and dependents of active and retired members
• Government
• Taxpayers

Board-Related Focus Areas in Pension Governance and Regulation

• Board composition
• Nomination and termination
• Accountability
• Performance measurement
• Definition of roles and responsibilities
• Standards of behaviour
• Information management and transparency

Benefits of Good Pension Governance and Regulation

• High pension fund performance, low stakeholder cost
• Lowered overregulation costs
• Appropriate and effective supervision by authorities
• Positive effects on economic efficiency

Challenges in Pension Governance and Regulation

• Corruption and misconduct
• Lack of expertise of the governing body
• Agency issues
• Uncertain population dynamics
• Lack of required resources and skill
• Conflicts of interest
• Lack of incentives for fund managers
• Board member issues
  • Lack of discipline
  • Lack of skill and expertise
  • Unclear, undefined responsibilities
  • Incorrect member selection

TRAINING METHODOLOGY

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participant will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.