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:
  1. Provide updated expectations on TKU, consulting on changes in the first half of 2021; 
  2. 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
  3. 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:futuretrusteeship@tpr.gov.uk.

The finer detail: Regulator views on the future of trusteeship and governance

 

For further information, please get in touch with Robert Wallace or Sophia Rayworth or speak to your usual XPS contact.

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