ENPAM, Italy’s first-pillar fund for medical consultants, has approved a new statute that streamlines its government structure and includes tighter legal requirements for board members.With the approval of the new rules, the fund’s directors also agreed to cut their pay by 20%. The changes to ENPAM’s internal regulation were announced last week along with the approval of its annual accounts, which show that the defined benefit fund recorded an 8.35% return in 2013.Total assets have now reached €15bn, making ENPAM one of the largest pension providers in the country in terms of AUM (the largest among first-pillar casse di previdenza and second-pillar industry funds). The new charter states that, in addition to convicts, those who have pleaded guilty for a number of crimes are not eligible for election as board members.Under the new rules, board members are reduced from 27 to a maximum of 17.The fund’s executive committee, a body that held power over certain decisions but was deemed ‘redundant’, is abolished. ENPAM said the changes would bring a significant reduction in costs, adding to the board’s decision to cut their remuneration. The charter addresses specific investment management issues, making the prudent person principle more explicit and setting new procedures for investments.It also outlines clearly what types of assets ENPAM can invest in, giving the board less discretion in terms of asset allocation.An ENPAM spokesperson said the wording of the new document implied that ALM effectively became a part of the fund’s statutory objectives. As well as forbidding convicts to be elected as board members, the new statute establishes a ‘code of transparency’ that makes access to information regarding the funds’ investment easier. ENPAM’s chairman Alberto Oliveti said in a statement: “With the changes to the statute, we have completed all the reforms we had planned for the 2010-15 mandate of the board. This makes us proud.“In 2011, we began reforming the investment management model, making it safer. In 2012, we reformed the provision of benefits, securing our sustainability for 20 years. Today, we are giving our members a pension fund where they can feel they have even stronger representation.”Members’ representation is heightened in the new regime, as they will be able to vote more representatives to the fund’s national assembly.More representatives, however, will not mean higher costs, as the budget set for the remuneration of representatives is kept at the same level in the new charter.A minimum of 20% of the elected representatives will have to be women. The fund embarked on a phase of transformation that began in 2011, after being involved in a controversy that resulted in the resignation of its former chairman, Eolo Parodi.He is currently being tried for charges relating to ‘toxic’ investments with a number of former ENPAM advisers. According to a statement by the fund, ENPAM’s finances are now in good health, with current assets covering pension obligations for 12 years, higher than the minimum funding requirement of five years’ coverage.At the end of last year, the surplus generated by investments amounted to €1.53bn after expenses and taxes.Oliveti added: “We can now begin thinking about actions directed at relieving the pressure on new generations. Once the new actuarial budgets are ready, if we have available resources, we could use them to reduce the burden borne by young members.”The work undertaken in recent years to strengthen ENPAM’s governance involved a major effort to scale back on risky assets.Under the threat of large losses from risky investments such as CDOs and structured notes acquired in pre-crisis years, the scheme began monitoring the drawdown risk of that portfolio more closely.ENPAM said that now the risk of significant losses from those past investments was no longer contemplated. The fund recently launched an international search for a new investment adviser, setting a deadline for awarding a mandate at the end of this year.