Pension trustees 'need to review stock loan procedures'

The Pensions Regulator has called the trustees of retirement schemes to investigate the terms under which fund managers loan out stock at a charge.

According to the Financial Times, the body issued guidance earlier in the month calling for reviews to take place, after it emerged that stock was being loaned without the knowledge or approval of trustees.

It raised the issue after being contacted by MP for Birkenhead Frank Field, who told the regulator that the chairman of a mid-sized pension fund had informed him of the problem.

The industry organisation said in its guidance that the practice of stock lending is widespread in the financial industry and it can generate fee income for pension schemes.

Trustees need to make sure they get a return proportionate to the risk they are taking, the Pensions Regulator added.

Under the Pensions Act 2004, the body has the task of protecting members of work-based pension schemes, as well as reducing the risks involved with pensions and promoting good administration.ADNFCR-2318-ID-19564999-ADNFCR