New DC code underlines TPR’s expectations of trustees
Thursday 28 July 2016
The Pensions Regulator’s new code of practice for defined contribution (DC) pension schemes, which sets out the standards that pension trustees need to meet to comply with legislation, has come into force today.
The code, which applies to all schemes offering money purchase benefits, is supported by a series of 'how to' guides that provide more detail on how trustees can meet those standards in practice. TPR has also produced a tool to help trustees to assess their scheme against the standards in the code, so that they can identify areas requiring improvement.
Executive Director for Regulatory Policy Andrew Warwick-Thompson said:
“Millions of people are being auto-enrolled into DC pensions, so it’s essential that schemes are being managed to a high standard.
“The new DC code clearly sets out our expectations of trustees and what is required of them to comply with legislation, including the most recent changes in law.
“In revising the code, we have responded to calls from the pensions industry to shorten and simplify it, with an increased focus on legislative requirements. It is also being published in a dynamic and user-friendly way, including for people using tablets and mobile devices, offering the ability to navigate directly from the code to relevant legislation and companion guidance online.”
An updated compliance and enforcement policy for occupational DC schemes has also been published. It describes TPR’s expectations for compliance with legislation and how it will proceed to enforce the law.
Mr Warwick-Thompson added: “We will act where trustees demonstrate that they are not meeting even the basic 'hygiene' duties of preparing their chair’s statement or completing a scheme return, as this is often an indicator of more serious stewardship failings.”
In a new video, Policy Lead at TPR Louise Sivyer provides more detail.
- The code is set out in six sections, with a 'how to' guide supporting each section:
- The code was laid in Parliament in May following consultation. Consultation on the accompanying 'how to' guides took place during April and May, and the response to that consultation has also been published today, along with the final Business Engagement Assessment (PDF, 92kb, 8 pages) which explains TPR’s assessment of the likely impact of the new code on businesses.
- TPR recently published its 21st century trustee discussion paper (PDF, 315kb, 27 pages) on how standards of trusteeship and scheme governance could be improved, as well as DC Trust-Based Pension Schemes Research (PDF, 907kb, 38 pages) into standards of governance and administration.
- TPR intends the new code and supporting guides to be accessed primarily online and has updated its website to reflect the code’s structure. For the first time, users will be able to link directly from the code to the related guidance, and to the relevant legislation. This will make it easier for trustees and their advisers to make full use of the material in their meetings and other discussions. The code and guidance will also be available in PDF format for those who wish to print the full documents.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of TPR’s functions under Part 3 of the Pensions Act 2004 only).
Tim Marks 01273 662092