Warren Edwardes is CEO of Delphi Risk Management, the London-based financial product creativity, communication and control consultancy.

Warren was previously on the board of Charterhouse Bank and has worked in the treasury divisions of Barclays Bank, British Gas and Midland Bank. He first researched into what were later to be called "derivatives" in 1975 and was part of the team that executed one of the world's first currency swaps in 1981. Since then he has devised and transacted numerous structures that form part of the history of derivatives. Warren can be contacted via we@dc3.co.uk

Warren Edwardes <note  spelling of edwardes> is author of best seller "Key financial instruments: understanding and innovating in the world of derivatives" which includes an appendix on Islamic Banking.  see http://dc3.co.uk/kfi

Edwardes is a Board Governor of The Institute of Islamic Banking & Insurance

Sir, "Pensions without paternalism" (November 20, 2001) followed by "M&S axes final-salary pension scheme" (November 26, 2001) illustrate the rapid shift away from final-salary pension schemes to money-purchase schemes. As you write "unlike final-salary schemes ... all risks on money-purchase pensions are borne by employees".

 

The shift in the risk burden to employees should be accompanied by a shift in responsibility and authority. Corporate pension schemes should be valued and quoted daily. And employees should have the right to transfer their pension funds away from their firm's scheme to an external fund manager of their choice or even to the pension scheme run by another firm. Thus M&S employees would have the right to move their pension scheme to Sainsbury's or vice versa, subject to performance or even to a self-select diversified pension portfolio.

Furthermore this would protect employees in firms where the pension funds invest in the parent company, such as at Maxwell's Mirror and more recently at Enron