Regulator to set out clear expectations for trustee knowledge and governance
What you need to know
- The Pensions Regulator (Regulator) has responded to its consultation on the future of trusteeship and governance. It had set out proposals in three areas: trustee knowledge and understanding (TKU), scheme governance structures and driving defined contribution (DC) scheme consolidation.
- In response, the Regulator has said it will take forward actions in each of these areas. In particular the Regulator will:
- Provide updated expectations on TKU, consulting on changes in the first half of 2021;
- Set up an industry working group on improving board diversity, and carry out a further review of sole trusteeship while supporting the development of an industry code on sole trusteeship; and
- Not mandate but rather monitor DC consolidation activity and work with industry and Government
to overcome barriers to consolidation.
Actions you can take
• Ensure all trustees of your scheme are aware of upcoming changes and the Regulator’s expectations.
• Review the operation of your trustee board and approach to training in advance of the new TKU requirements.
• If considering sole trusteeship for your scheme, ensure you look at managing conflicts of interest and member engagement and look out for the upcoming APPT industry code.
• Consider joining the industry working group on board diversity before 29 February 2020. Apply by emailing:firstname.lastname@example.org.
The finer detail: Regulator views on the future of trusteeship and governance