Trustee Knowledge and Understanding code laid before Parliament

The Pensions Regulator's code of practice on trustee knowledge and understanding has been laid before Parliament.

The Pensions Act 2004 introduces the requirement that trustees of occupational schemes are conversant with their own scheme documents and have appropriate knowledge and understanding of trusts and pensions law and of the principles of funding and investment. The extent of the knowledge and understanding required will be appropriate to the trustee's functions.

The regulator's code of practice sets out practical guidance for trustees on how they can comply with the new legal requirements, which come into force on 6 April 2006.

Existing pension scheme trustees will have six months in which to acquire the relevant level of knowledge and understanding to ensure they are able to meet the requirements. New trustees will have six months from the date of their appointment.

The code of practice is available on the regulator's website at:
www.thepensionsregulator.gov.uk/codesOfPractice/index.aspx along with the Scope of trustee knowledge and understanding, a checklist of the topic areas of which trustees need to know and understand.

To provide trustees with free and relevant learning and help them to meet the new requirements the Pensions Regulator has developed an e-learning programme, the Trustee toolkit. For immediate registration visit: www.trusteetoolkit.com/

1. The Pensions Act 2004 (sections 247-249) requires 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. The requirements relating to trustee knowledge and understanding come into force on 6 April 2006.
2. The Pensions Regulator's code of practice was laid before Parliament on 23 March 2006. Codes of practice are not statements of the law. However they do have evidential value, meaning they will be taken into account by the Determinations Panel, a court or tribunal where relevant. Although the code may not be the final version it does contain the Pensions Regulator's expectations which have been accepted by the Department for Work and Pensions. Therefore, trustees and employers can be confident they can start to act in accordance with the guidance contained in the code.
3. The Pensions Regulator worked closely with the pensions industry to develop the Scope of trustee knowledge and understanding, a checklist of the topic areas of which trustees need to know and understand. The information within the Scope documents, at a high level, is contained in the code of practice.
4. The Trustee toolkit programme syllabus has been based on the Scope guidance. The Scope will also form the basis of a new voluntary qualification for trustees to be launched by the Pensions Management Institute in April. This new voluntary qualification will replace the current Trustee Certificate offered by the Pensions Management Institute.
5. The Pensions Regulator is the regulator of work-based pensions in the UK, with wider and more flexible powers under the Pensions Act 2004. It replaced Opra which no longer exists.
6. 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.

• Andrew Winstone 01273 627752
• Amy Balchin 01273 627207
• Out of hours 01273 648496
• amediarelations@thepensionsregulator.gov.uk
• http://www.thepensionsregulator.gov.uk/

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