Key Dates

Consultation paper issued on 2 July 2019.

Consultation ends on 24 September 2019.

Summary

The Pensions Regulator has issued a consultation paper on the future of trusteeship and scheme governance.  The consultation has been driven, in part, by concerns that small and micro schemes are not meeting expected standards of governance.  Key points include the following.

• The Regulator will seek to facilitate and encourage scheme consolidation, with authorised master trusts and group personal pensions being possible routes for consolidation of DC schemes.
• The Regulator is working with the DWP on supporting DB consolidation, including an authorisation and supervision regime for DB superfunds.
• Views are sought on how diversity may be increased on trustee boards, including whether legislation should require schemes to report on the steps being taken to ensure the trustee board has the necessary diversity of skills and reflects the scheme membership.
• Consideration is being given to whether every trustee board should be required to have an accredited professional trustee.  The Professional Trustee Standards Working Group (PTSWG) issued standards for professional trustees in March 2019 and these are expected to form the basis for industry accreditation.
• Over the following two years, the Regulator expects to proactively drive up a range of specific governance and administration standards, including on investment governance, record-keeping and prompt and accurate financial transactions.
• The Regulator plans to revisit its trustee knowledge and understanding (TKU) code and scoping guidance, which was last reviewed in 2009. 
• Trustees will be increasingly expected to demonstrate how they meet TKU requirements.  The Regulator is seeking views on whether there should be a legislative requirement to demonstrate a minimum level of TKU and, potentially, to undertake a minimum level of continuing professional development (CPD) each year.
• The Regulator will review and revise its codes of practice to help trustees comply with the requirement under the IORP II directive to have an effective system of governance.
• The Regulator is concerned at increasing use of a sole trustee model for DB schemes and invites views on whether governance standards for sole trustees should be strengthened.
• The Regulator supports the DWP's proposal that schemes should issue a triennial statement on whether they should consolidate into a larger scheme, but believes it would be best practice for schemes to consider this annually as part of the value for members assessment.

Date Accessed: 28/05/2022