A discussion paper on the regulation of funded pensions.by E. Philip Davis of Brunel University concludes that the U.K. offers both positive and negative lessons for policy makers in other countries.

It concludes that the U.K. pension industry’s regulatory structure remains unwieldy, with several statutory bodies jointly responsible for regulation. The frequency of change in pension regulations is another weakness, it says.

But it lauds the U.K. system for providing an appropriate balance between costs for the sponsor and protection of the beneficiary. The report mention such features as tax laws which allow funding on a projected benefits basis, and the independence of the fund from the employer.

The study also notes that consumer education is lacking. “Information for holders remains inadequate, not least given the complex choices they are faced with and their total dependence on fund managers’ performance. To some extent, holders need understanding and education and not merely information.”

On the subject of personal pensions, it notes, “The low level of understanding of pension schemes by individuals has meant that information alone is not enough. The UK concluded at an early stage that both ‘best advice’ obligations and legal sanctions are needed to avoid abuses.”