Consultation documents published today by the Department for Work and Pensions (DWP) in conjunction with the Treasury set out proposals and options for progressing three of the key recommendations in the Myners report.

The issues are

1. the need for trustees to be familiar with the issues concerned when reaching investment decisions;
2. whether a scheme custodian should be required, either by law or as good practice, to be independent of the employer; and
3. whether shareholders (trustees and fund managers) should be required by law to intervene in companies where, on balance, this is in a pension scheme’s best interests.

On the first issue, the Government wishes to introduce a new standard of care, based on the American model, for trustees dealing with investment matters. This refines the existing "prudent man of business" principle to the standard a prudent person "familiar with such matters" would use (while deliberately avoiding definition of "familiar"). It specifically does not want either MNTs or indeed non-investment professionals excluded, which means that additional training may be needed.

This work will be linked to the concurrent Pickering Simplification Review; the Sandler review of medium and long-term savings; the Inland Revenue’s own simplification review ; and the Company Law Review. The consultation papers make it clear that the Government wishes to introduce regulation only if it is practical, provides effective protection and benefits which justify any additional burdens on business, and commands public confidence (so no more MFRs, then). "Doing nothing is not an option", the accompanying "Partial Regulatory Impact Assessment" firmly asserts, however.