How we assess fitness and propriety

CDC code in force: 31 July 2026

1. For single-employer CDC schemes, the 2022 Regulations and for multi-employer CDC schemes, the 2025 legislation sets out the matters that we must take into account when determining whether we are satisfied that a CDC scheme is operated by fit and proper persons¹. It also allows us to take into account such other matters as we consider appropriate, including matters relating to connected persons². In carrying out our assessment, we will consider their honesty, integrity, financial soundness, their competence to fulfil the requirements of their role and their current and past behaviour (conduct).
2. We will also consider:
   1. the impact on others of the past or current behaviour or actions
   2. how long ago any issue of concern occurred
   3. whether there has been a pattern of behaviour which creates concern
3. The following modules (honesty, integrity and financial soundness, assessment of competence and experience and conduct of individuals involved with the scheme) describe the factors that are more likely to satisfy us that a scheme is operated by fit and proper persons.
4. In a few serious matters, for example certain unspent criminal convictions or bankruptcy, we are very unlikely to be satisfied that an individual is fit and proper. This is because these are strong indicators that a person lacks the integrity or competence needed to be charged with the care of members’ pension savings and managing their scheme.
5. If an application is submitted where these serious matters are relevant to an individual, trustees should explain how they took reasonable steps to satisfy themselves that the individual meets the requirement to be fit and proper.
6. In some cases, an individual will automatically be barred under existing legislation from acting in certain capacities; for example, an undischarged bankrupt cannot be a trustee.

Legal references

¹ Regulation 8 and Schedule 1 to the 2022 Regulations and Regulation 31 and Schedule 1 to the 2025 Regulations

² Section 11(3)(b) of the Pension Schemes Act 2021

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