The Pensions Regulator (TPR) has set out how it will generally use its powers to impose monetary penalties and its revised description of who it considers to be a professional trustee, after listening to the views of the pensions industry.
Publication of the monetary penalties policy and revised description continue TPR’s drive to improve standards of trusteeship and governance, key underpinning factors in achieving good outcomes for members.
The new description paves the way to build standards and accreditation for professional trustees through the Professional Trustee Standards Working Group (PTSWG), which has been established by the industry’s professional trustee bodies. The group is developing higher standards for those who are considered to be professional trustees.
Representative and professional bodies, trustees, pension providers and advisers were asked for their thoughts on TPR’s proposed approach earlier this year. The consultation also included a request for views on the way TPR imposes monetary penalties.
Today TPR has published its professional trustee description policy, which explains its revised description and gives examples of when it may consider someone to be a professional trustee.
The new description focuses on whether a person’s business includes trusteeship. Someone will normally be considered a professional trustee if they have represented themselves to one or more unrelated schemes as having expertise in trustee matters generally. Professional trustees are likely to be given higher penalties under the penalties policy.
Anthony Raymond, TPR’s Acting Executive Director for Regulatory Policy, said:
“It is vital that trustees have the right skills to ensure that their pension scheme is managed effectively but it is also right that they are held to account if they fail to provide proper governance.
“Professional trustees bring real benefits to a board through their expertise and experience, sharing knowledge and good practice from other schemes.
“Our role is to protect members’ benefits and the policy sets out who we will consider to be a professional trustee and hold to a higher standard.
“We want to see good quality professional trustees who improve the governance of pension schemes and the standards developed through the PTSWG will help employers and trustees know what to look for when appointing a professional trustee.”
TPR has also today published its monetary penalties policy, which explains how it will generally use its powers to impose penalties under pensions legislation, and its consultation response.
To view the response and policies go to monetary penalties policy and revised professional trustee description consultation.
Those who responded to the consultation were generally supportive of TPR’s approach and the differentiation of penalties between professional and lay trustees.
TPR will publish regular bulletins setting out how it has used its powers, including monetary penalties it has applied.
- We set out in the response to our 21st century trusteeship and governance discussion paper that we plan to make greater use of our powers, including our power to impose monetary penalties, where there have been scheme governance and administration failings.
- To provide clarity for those we regulate, we consulted on a draft monetary penalties policy and revised description of a professional trustee between 23 March and 9 May 2017. We received 27 responses. A full list of respondents is included in the appendix to our consultation response.
- We encouraged the industry’s trustee bodies to set up the Professional Trustee Standards Working Group (PTSWG), which establishes standards and accreditation for professional trustees. Chaired by the Association of Professional Pension Trustees (APPT) its members represent The Association of Corporate Trustees (TACT), the Pensions and Lifetime Savings Association (PLSA), the Pensions Management Institute (PMI) and TPR.
- 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; 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).