It has two months since he announced an imminent consultation on what we should expect from pension trustees. While Torsten Bell has been busy getting a bill through , CDC going and a budget over the line, this document has been sitting idle and it doesn’t arrive with a lot of urgency attaching to it!
Louise was till recently a TPR stalwart and now she leads the way at one of our largest and most dynamic firms of professional trustees , IGG. I suspect there’s a little frustration in this short message to the market! If it’s important to the Torsten Bell DWP it only takes 6 weeks.
So thanks to Professional Pensions for this smorgasbord of ideas which can be fun in the consultation
The DWP said the 2024 Work and Pensions Select Committee DB report and the 2023 independent review by The Pensions Regulator (TPR) both recommended mandatory accreditation for professional trustees, noting it wants to “explore what additional requirements should be placed on professional trustees given the increasingly influential role they play in the UK pension system”.
The consultation also sets out measures to improve the diversity of trustee boards. The DWP said ensuring diversity of thought on trustee boards is a “key pillar of good governance”, noting it wants to explore ways it can bring more diversity, talent and skills to trustee boards, asking what role the government and regulators can play in helping schemes attract a diverse and talented pool of individuals to trusteeship, and whether there should be any limits on the length of trustee appointments.
The consultation also asks whether there is a role of a public independent trustee appointed by TPR to be used where a scheme’s trustees need to be replaced or when TPR is asked to appoint a trustee to an orphan scheme.
Additionally, the consultation asks respondents what they think works well in the current trusteeship and governance system, what the barriers to good trusteeship are, and what further support trustees need looking ahead to 2030 and beyond.
It also looks at whether TPR should have the same levels of regulatory oversight as the Financial Conduct Authority regarding administrators and services and whether administrators should have to be registered with TPR to be involved in administering a scheme. It also asks whether increased consolidation activity poses any risks and how any risks can be mitigated to ensure an orderly transition to pension ‘megafunds’.
APPT has hardly been blown away
Association of Professional Pension Trustees (APPT) chair, Rachel Croft, agreed that trustees need to continue to have the right skills and experience and that to be fully prepared to take schemes forward successfully.
“We note the important role the paper outlines that professional trustees are playing in this,” she continued.
“We welcome the trustee directory, subject of course to it not being excessively onerous administratively. We also welcome the questions on accreditation and standards as areas we are already examining and looking at with key stakeholders.
“Administration is also a key consideration for the consultation. Trustees are well-placed to support the development and improvement of administration services that members receive and professional trustees are playing a key role here.”
However, she said that the APPT had one caveat at this early stage in the consideration of the consultation document: “Naturally, we advise careful consideration of applying any restrictions to appointment numbers or terms, given the need to manage market capacity and encourage the continuation of training and development for professional trustees.”
Change is needed. TPR currently does not have capacity nor authority to regulate pension scheme administration. This strikes me as of first importance to this consultation, most of the local problems people have with pensions come from poor administration.
While this is swimming along , we should be getting a consultation from the Pensions Regulations before Christmas on a code of practice for CDC authorisation. I suspect it will look rather like the last one we had in 2022!
I suspect that it will put the trustees at the heart of the authorisation process and I look forward to responding to both.