The Pensions Regulator

Strategic Investment module of Trustee toolkit released

Ref: PN07-04
11 April 2007

The Pensions Regulator has issued the latest module of its free online e-learning programme for trustees at www.trusteetoolkit.com. It completes the learning on investment and follows the module on fund management.

Aimed at trustees of both defined benefit and defined contribution schemes, the module aims to help users understand the advice they may receive on strategic investment and to assess whether the solutions offered may be appropriate for their scheme, considering factors such as size and maturity of the scheme, the strength of the employer covenant, the attitude of the employer and the trustees’ appetite for risk.

The module introduces the ideas of diversification, risk modeling, alternative asset classes and interest rate swaps. It concludes with the development of a statement of investment principles.

Trustees will have the opportunity to work through scenarios and make decisions similar to those they will face in their own schemes. The objective is that they should be able to make informed decisions about the investment strategy for their own schemes, and make an objective assessment of proposals made to them.

Regulated community learning manager Terry Clayworth said: “The interactive aspects of this module should help provide an original and enjoyable learning experience for trustees looking to find out more about strategic investment.

“The feedback we’ve received on other modules so far has been extremely positive - we’re hoping trustees will find this next module just as useful.”

Editor's notes

1. The Pensions Act 2004 (sections 247 to 249) requires all trustees to have knowledge and understanding of the law relating to pensions and trusts, and the principles relating to the funding of occupational schemes and the investment of scheme assets. They must also be conversant with their own scheme’s policy documents.
2. This module is aimed primarily at trustees of schemes of more than 100 members. This module is not part of the required learning path of trustees with schemes of less than 100 members as they are exempt from the requirement under the Pensions Act of producing a statement of investment principles.
3. The code of practice on trustee knowledge and understanding helps trustees to comply with the requirements and can be found, along with additional guidance for trustees, on the regulator’s website at www.thepensionsregulator.gov.uk
4. The Trustee toolkit syllabus has been based on ‘Scope guidance’ available on the regulator’s website, and also forms the basis of a new voluntary qualification for trustees launched by the Pensions Management Institute (PMI). The new voluntary qualification will replace the current Trustee Certificate offered by the PMI.
5. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide-ranging and flexible powers under the Pensions Act 2004. The powers of the Pensions Regulator include the ability to:
   • collect more detailed scheme information;
   • issue improvement notices and third party notices, enabling the regulator to ensure problems are put right;
   • freeze a scheme that is at risk, while the regulator investigates; and
   • prohibit trustees who are judged not fit and proper to carry out their duties.

   The Pensions Act 2004 also imposes a statutory obligation on ‘whistleblowers’ to report suspected breaches of the legislation to the regulator.