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New guide highlights responsibilities for trustees towards derivatives

07 December 2011

A new guide is being published today (Wednesday) by the National Association of Pension Funds (NAPF) to illustrate the responsibilities of pension trustees towards the use of derivatives by the schemes they govern.

“Derivatives: A practical guide to trustees’ responsibilities” is launched at a time when derivatives are under scrutiny because of the global financial crisis. Regulation from the EU is expected to come into effect from the end of 2012.

The guide addresses what trustees need to do to monitor and control their scheme’s derivative positions, as well as when they need to make decisions on the use of derivatives. It provides practical guidance on governance, modelling, implementation, collateral, execution, monitoring and accounting requirements.

NAPF Chief Executive Joanne Segars said:

“Derivatives play an important role in the risk mitigation strategies of many pension schemes. Trustees not only need to understand what derivatives are, but they also need to know what their responsibilities are for the oversight of their scheme’s derivative activities and for decisions about the use of derivatives.

“With derivatives facing increasing regulatory attention, it is essential that trustees are aware of what their role and responsibilities are concerning these important financial instruments. This guide will help give them the clarity they need.”

The guide complements the Derivatives made simple guide launched last year, which explained what derivatives are and how they work.

 

Notes to editors:

1. A limited number of copies of the earlier Derivatives made simple are still available and can be ordered online at a special sale price via the NAPF Shop. A free copy of the new derivatives guide, Derivatives: A practical guide to trustees’ responsibilities, is included with every copy of the Derivatives made simple.

2. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,200 pension schemes with some 15 million members and assets of around £800 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.

Contacts:

Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]

Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]