It’s not just banking regulation that needs tightening but private pension schemes are badly in need of better governance and stronger oversight.
The OECD is calling for both in new guidance issued today, rolling out a blueprint with recommendations on governance, funding, investment and the rights of pension plan members.
Pension funds should improve their risk-based governance structures, taking into account the scale of the fund and short and long-term risk exposure. The organisation is also keen to make sure employees are sitting on pension fund boards but warns that’s not enough. All board members need to understand the ever growing complexity of issues involved in important investment decisions.
So all that may come as a tall order for many countries to comply with, including current wannabe OECD member countries such as Chile, Estonia, Israel, Russian Federation and Slovenia.
Just to make sure these potential newcomers measure up to existing and new principles and guidelines, the organisation is busy putting them through their paces and assessing their regulatory and supervisory frameworks.