Legal & General has unveiled plans to extend its independent “trustee style” governance used in the structure of its WorkSave Mastertrust to contract based workplace pensions and will initially focus on default funds.

In a briefing this morning, Legal & General Trustees chairman Paul Trickett stated that the new structure, Independent Governance Oversight (IGO), will work both with schemes’ own governance committees and will take sole responsibility where no other governance exists.

Trickett stated: “IGO will mirror the governance structure of Legal & General’s WorkSave Mastertrust where the balance of power is independent of the Legal & General Group of Companies. We will utilise the support infrastructure embedded for the MasterTrust so that our own approach is consistent across the DC spectrum.

The contrast in governance between trust based schemes and contract schemes has been highlighted recently and the Work and Pensions Select Commitee has contantly urged the government to emphasise the importance of setting up governance committees for contract-based schemes in order to protect the interests of the members.

Trickett added: “Many contract schemes work with very high levels of governance, with the sponsor, their advisers and their chosen provider collaborating to the benefit of the members. But many others do not operate with such high standards, and some schemes will be wholly reliant on the provider.”

The IGO consists of Paul Trickett who will act as chair, Pitmans Trustees director Steve Carrodus, L&G managing director of workplace savings Tony Filbin, L&G investment and product development director for workplace savings and L&G head of scheme restructuring Paul McBride.

The Work and Pensions select committee is urging the government to help employers set up “governance committees” for contract-based pension schemes in response to concerns about a lack of protection for members

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