1 Sections 9(3)(d) and (e), 15, and 16 of the Pension Schemes Act 2021, and Regulations 13 and 14 and Schedules 4 and 5 to the 2022 Regulations and Regulations 36 and 37 and Schedules 4 and 5 to the 2025 Regulations
Systems and processes: overview
CDC code in force: 31 July 2026
- The trustees of a CDC scheme must satisfy us that it has sufficient systems and processes to run effectively in the areas of administration, scheme governance and communications1. For multi-employer CDC schemes this requirement also includes promotion and marketing.
- For us to be satisfied, we will assess the:
- processes for supporting the different functions to administer and govern the scheme effectively
- functionality and maintenance of the IT systems used in scheme administration and governance, member communications
- for multi-employer CDC schemes only, promotion and marketing structures for governing the scheme
- While we recognise that a scheme will not have started the administration work before authorisation, we will expect its systems and processes to be developed enough so they can be assessed. We will need evidence to satisfy us that there are sufficient systems and processes in place. This code uses the term processes to mean policies, processes and procedures.
- We recognise that, in some matters, trustees may rely on a third party to give them information about how a scheme will be administered. In these circumstances, while the activity itself can be delegated, accountability cannot. Trustees must assure themselves of how the requirements are met.
- We need to see that service provision contracts have been agreed between the parties and were reviewed and given appropriate consideration by the trustees before a decision to appoint was made. Service providers should agree to bring to the attention of the trustee anything that they become aware of that may cause the trustee to cease to meet the authorisation criteria and maintain a high governance standard. Trustees should be particularly careful of clauses which exclude or limit the service provider’s liability, clauses by which a trustee is required to indemnify the service provider and
force majeure clauses which are not balanced between the parties. - The authorisation application should explain how trustees have assessed that the scheme meets and will continue to meet the systems and processes requirements.
- This could be demonstrated through independent checks, such as agreed-upon procedures, internal audits and scheme documentation, particularly in respect of ensuring the functionality and maintenance of IT systems.
- If the trustees do not have access to internal expertise to assess systems and processes, the authorisation application should include evidence that the scheme has had an independent external assessment, particularly in respect of ensuring the functionality and maintenance of IT systems.