THE way company pension funds are run and members' money is invested has improved despite a harsh financial climate and increased red tape, a pensions group has reported.

The National Association of Pension Funds (NAPF) said a review of how companies were implementing the so-called Myners Principles had shown that overall standards of pension scheme governance had continued to improve.

The group said this was despite the fact that being the trustee of a pension fund had become more complicated in recent years as a result of the current financial climate and increased regulatory burden.

In 2001 chairman of the Low Pay Commission Paul Myners recommended a series of voluntary principles for pension scheme trustees to improve the way pension funds were run and investment decisions were made following a government-backed review.

But the NAPF said that while the principles remained relevant, they were in need of refreshing to ensure they continued to reflect best practice and took account of developments in legislation, regulation and the financial markets since they were first introduced.

It said there was also scope to simplify and consolidate them from their current 10 principles to just six.

Chief executive of the NAPF Joanne Segars said: "The review has shown that, against a tough background for pension fund trustees, great strides have been made in governance and investment decision-making.

"Only a few areas need further attention, including trustee self-assessment, and our recommendations for change are directed at addressing these issues.

"The pensions world has moved on significantly since the principles were first drawn up six years ago.

"The report's recommendations will bring into line the roles and responsibilities of trustees in the current climate and offer support to those who need it."

An estimated 100,000 pension trustees currently look after 66,000 occupational pension schemes, investing more than £1 trillion for 20 million members.

Economic secretary and city minister Kitty Ussher welcomed the findings of the review and said the government would consider them before launching a consultation on how to improve the principles next year.

She said: "The NAPF review's findings reinforce the relevance of the Myners Principles.

"But further industry input into, and advocacy of, the principles is important if they are to operate effectively, and to continue to adapt in response to changing market conditions."