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(CNS Business): The Chamber of Commerce Pension Plan said Monday that it had recently embraced the Code of Conduct developed by the CFA Institute for pension plan trustees, emphasising what it described as the “transparency, integrity and strong governing principles” in the pensions operations. The news comes ahead of the government’s plans to implement a new pension’s law that will change the rules for pension funds and their managers and include a requirement for more transparency and training of trustees. The proposals for the new legislation have met with some criticism, however, from those advocating for members as well as the industry.
One of the goals of the new National Pensions Bill 2012, according to government, is to improve the regulation of pension plans, pension plan trustees and pension plan administrators. The Cayman Islands Monetary Authority will, under the new law, become the industry regulator as government claims the function is similar in nature to the regulation already undertaken in respect of other financial services products.
Other aims of the bill include making more information on pension plan performance available to members and to improve the administration of pension plans.
In a release the Chamber said it was the first pension plan in the Cayman Islands to adopt the voluntary international standard of governance. The code was developed by the Chartered Financial Analyst Institute, a global association of investment professionals that claims to have set standards across the financial sector for fifty years.
Bill Fleury, the Chamber Pension Plan’s COO and General Manager said taking on the code showed the plan was committed to the highest levels of oversight.
“How we govern our pension schemes here in the Cayman Islands has the potential to significantly affect the lives of all employees who are dependent on their pensions,” he said. “It is therefore a responsibility that we at the Chamber Pension Plan take extremely seriously, hence our decision to take on the CFA Institute’s Code of Conduct for Members of a Pension Scheme Governing Body.”
Fleury added that the Code represented best practice in the industry internationally and required the Pension Plan to demonstrate its commitment to serving the best interests of participants and beneficiaries.
“It provides an ethical framework for governing board members to follow while executing their responsibilities to the Plan,” Fluery stated. “At its core are ten fundamental ethical principles for pension fund trustees, providing guidance for those who oversee the management of such plans. Such principles include acting in good faith and in the best interests of scheme participants, acting with prudence and reasonable care and acting with skill, competence and diligence.”
Other principles include maintaining independence and objectivity by avoiding conflicts of interest, abiding by applicable rules and regulations and generally taking actions that are consistent with the established mission of the scheme.
“Maintaining confidentiality of the scheme, participant and beneficiary information is another major component of the guiding principles, as is maintaining communication with all concerned in a timely, accurate and transparent manner,” the pension boss added.
Following the code is likely to assist the Chamber pension in compliance with the proposed legislation but it is understood that the business organisation still has issues with the proposed law after submitting a significant discussion document to government during the recent consultation period.
The Chamber has pointed to a number of remaining weaknesses in the new law and has recommended more transparency and regulation of those involved in the industry. These sentiments have been echoed by those advocating for employees to have a greater say in which plans their firms select and the need for far more transparency than government is currently proposing.
The bill is expected to be debated on the floor of the Legislative Assembly in November when the LA finally returns after a significant gap following the completion of the budget. The bill was listed on the order paper during the budget session but was withdrawn by Education, Training and Employment Minister Rolston Anglin as a result of further changes being required.
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