The report* on investment choices in defined contribution plans, published on April 23 by the Pensions Institute at Cass Business School, is timely. These schemes are becoming an ever more important source of pension provision as defined benefit plans are closed to new entrants and future accrual. Although they have closed mainly on account of financial risk, regulation has played its part as well.

So the report's call for greater regulation of DC plans, and for employers and advisers to assume greater fiduciary responsibilities, is balanced by a plea for a UK equivalent of US "safe harbour" rules. These enable sponsors who can show that they have followed statutory requirements to insulate themselves from the consequences of poor investment decisions. There are in fact a number of different "safe harbours". One of them, for example, gives protection against the consequences of poor active investment choices; another relates to the sponsor's choice of default fund.