Keeping pensions safe - improving scheme governance and administration

The regulator today launches a campaign aimed at encouraging good governance and administration and better management of pension scheme risks. A statement published alongside results of the 2009 pension scheme governance survey outlines the regulator's key focus areas.

The regulator makes clear that trustees responsible for running pension schemes need to be sure that:

• they have the right skills, and they get the right people to help them run their pension scheme;
• they have the right processes in place to manage scheme risks.

Pensions Regulator chief executive Tony Hobman said:

“Good governance underpins secure pensions.

“Scheme members entrust their pension savings into the hands of others to a total estimate of more than £1 trillion in assets, often for decades of their working lives.

“The scale of the market and the importance of the task of managing people's life savings to secure their income in retirement require robust standards of pension scheme governance.

“This campaign is designed to build on progress made in recent years, recognising that trustees perform a critical role in protecting and managing pensions, and are faced with challenges in this difficult economic context.”

Executive director Bill Galvin added:

“We seek to support trustees as they manage and monitor their scheme risks and the people they employ to help them.

“There are over 60,000 occupational pension schemes in the UK, so this is important right now. With the introduction of auto-enrolment, millions more people and over one million employers will be brought into occupational pension saving for the first time. Good governance will be critical to ensuring the safe and proper management of people's savings.

“In partnership with our regulated community, our intention is to raise the standards of governance to secure robust foundations for reform.”

Over the next few months the campaign will renew the regulator's focus on governance and administration aiming to improve standards across the industry by:

• providing updated guidance on internal controls;
• publishing a revised scope and guidance for trustee knowledge and understanding;
• publishing bite-sized e-learning for trustees on risk management;
• consulting on new proposals for record keeping; and
• updating existing guidance on winding up pension schemes.

You can view and download the statement and the survey report on our governance and administration campaign page.

1. The governance statement can be accessed on the Pensions Regulator's website, as can the annual governance survey
2. The fourth annual governance survey was conducted amongst trust-based defined contribution, defined benefit and hybrid schemes with 12 or more members. Nearly 800 trustees were interviewed over two waves.
3. The survey was conducted by a new supplier, IFF Research, who were appointed following a review of the governance survey conducted in September 2008.
4. The Pensions Regulator is the regulator of work-based pension schemes in the UK, with objectives to protect members' benefits, promote good administration and reduce the risk of calls on the Pension Protection Fund. Our approach is risk-based focusing on education and enablement, with enforcement where appropriate. We have the ability to:
   
   • collect information about pension schemes; through scheme returns, under the scheme funding regime and as well as statutory (including whistleblowing) reports;
   • issue notices requiring actions to tackle non-compliance, prohibit trustees who are judged not fit and proper to carry out their duties or appoint independent trustees;
   • direct pension schemes as to how to calculate their liabilities and the contributions required;
   • issue a contribution notice where there is an attempt to avoid liabilities, or a financial support direction where the employer is a service company or insufficiently resourced.
     

Katherine Long 01273 811859
Ben Lloyd 01273 627208
Ruth Hallam 01273 627752
Out of hours 01273 648496
www.thepensionsregulator.gov.uk

Non-press enquiries:
Customer support 0870 6063636
customersupport@thepensionsregulator.gov.uk