An independent trustee of Lighthouse Pensions Trust, which provides pensions schemes designed for auto-enrolment for employers including major trade unions, has announced it is to formally adopt the FTSE UK DC benchmarks.

Bridge Trustees Limited is adopting the benchmarks as part of its investment governance process, which will enable it to evaluate the success of returns relative to inflation, and compare strategy with the FTSE UK DC 100 per cent benchmark.

Ian Davies, an independent trustee from Bridge Trustees Limited said the benchmark will ensure best practice.

"The recent Department of Work and Pensions consultation and draft legislation on default strategy reviews makes clear that proper evaluation and review of the default investment strategy will become a priority," he said.

"For this we need the appropriate toolkit to inform a more meaningful discussion and the creation of the FTSE UK DC benchmarks is a welcome and progressive step in this respect."

The primary benchmark of any scheme is whether it delivers its objectives in the best interests of its members but adopting the FTSE UK DC 100 per cent benchmark will give the Lighthouse Trust additional assurance.

The scheme's investment governance processes are based on The Pension Regulator's Template for Governance Plan, which provides a checklist of processes against the 'principles for investment governance' of work-based defined contribution (DC) schemes.

Kevin Bourne, managing director of AOG, FTSE Group said the benchmark has been developed to promote transparency.
"With auto-enrolment creating up to nine million new savers, it is essential that fiduciaries and decision-makers are able to ensure the interests of these investors are put first," he said.

Lighthouse is one of the UK's largest autonomous financial advice and wealth management groups, providing a range of services to businesses and individuals, including most of the major trades unions.

Managing director of Lighthouse Group Employee Benefits, Roger Sanders, said: "We are supportive of initiatives by the Trustee to ensure that the Lighthouse Pensions Trust continues to innovate in line with evolving best practice, to build on the exacting standards we applied from launch."

"It is essential to us and our employer clients that members' interests are put first, and we are glad that the investment governance framework can be better informed by this development."

First published 05.02.2015

Lindsay.sharman@wilmington.co.uk