Defined Benefit  

Regulator pushes to boost schemes’ governance

Regulator pushes to boost schemes’ governance

The Pensions Regulator (TPR) has launched a new campaign to drive up the standards of governance across pension schemes.

The campaign, called 21st Century Trusteeship – raising the standards of governance, outlines how people involved in running schemes can take action to meet expected standards.

It also established what action the regulator will take if they do not improve.

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The results of recent surveys of defined benefit and defined contribution schemes show that while some trustees are doing a good job, many trustee boards have failed to act on the regulator’s codes and guidance to meet basic standards of good governance.

According to Anthony Raymond, acting executive director for regulatory policy at The Pensions Regulator, “pension schemes should have a skilled and engaged board, led by an effective chair, have robust risk management in place and good relationships with advisers and third parties”.

As part of the campaign, the regulator will send targeted emails which will direct trustees, scheme managers, employers and advisers to a new page on its website.

There they will find specific and relevant content that sets out clear standards that The Pensions Regulator expects schemes to meet.

They will also be signposted to supporting resources, including guidance within the regulator’s codes of practice and practical tools to help trustees raise the standards of governance in their schemes.

Mr Raymond said: “We have set out our intention to be clearer, quicker and tougher.

“This campaign is one of the ways we are delivering this commitment and I would like to see all trustees visit the new campaign web page to ensure they are doing all they can to safeguard their members’ benefits."

The trustees who fail to respond to the regulator’s “more directive approach may face further regulatory action,” he added.

Darren Redmayne, chief executive of Lincoln Pensions, welcomed the regulator’s initiative.

He said: “Trustees are at the forefront of safeguarding benefits but The Pensions Regulator’s research shows some have been slow or even resistant in following the regulator's guidance.

“However, this approach will increase the regulatory burden on schemes of all sizes, which can be particularly felt by smaller schemes struggling to manage budgets.”

To Mr Redmayne, the obvious “winners” of this campaign will include the professional trustee and covenant advisory firms who “will see even more work come their way as lay trustees respond to these reaffirmed expectations”.

Last August, the regulator tightened the standards for who it considers to be a professional trustee.

The new description focuses on whether a person’s business includes trusteeship.