Scheme governance

CDC code in force: 31 July 2026

1. Good governance ensures that a scheme is well-run and issues are managed effectively. Effective governance provides the trustees with oversight of the day-to-day running of the scheme, clear accountabilities and delegations, and a basis for assessing that the scheme is meeting all legal requirements over time. The regulations set out matters that we must take into account in respect of scheme governance as part of the systems and processes requirement¹.
2. Each multi-employer CDC scheme is required to have a scheme proprietor. We expect there to be an open and cooperative relationship between the proprietor and the trustees.
3. We must see evidence that a CDC scheme has a coherent governance structure with clear accountabilities and delegations. Trustees should also be able to demonstrate how the scheme will be governed on a day-to-day basis.
4. We are more likely to be satisfied where the following matters are addressed:

Governance structure

5. There is an organisation map setting out the governance structure for the scheme.
6. The map sets out the governance structure split by function.
7. The map identifies and documents all the functions the trustees think relevant, including:
   1. managing the trustee board
   2. scheme administration
   3. investment strategy (including its setting, implementation, management and communication)
   4. functions of the scheme proprietor in providing funds to the scheme
   5. management and use of the scheme’s financial resources
   6. actuarial matters
   7. member communications
   8. the promotion and marketing of the scheme (if any)
   9. the commercial activities of the scheme (if any)
8. For each function, the map identifies:
   1. a person that is responsible
   2. all individuals that have a strategic, executive or management role
   3. any sub-committees, and the individuals sitting on them
9. The map is reviewed at least annually.

Responsible persons

10. A responsible person is identified for each function. This person has significant influence over and/or day-to-day responsibility for managing the function and the planned work in that function. The responsible person is, where applicable to the function they perform, assessed for fitness and propriety.
11. A statement is provided to explain why the responsible person has sufficient skills to manage the function.
12. The responsible person has relevant experience in the function they are responsible for. This should also be reflected in the evidence provided for the fit and proper assessment.
13. Where an individual is a responsible person for more than one function, there is an explanation of how they will have the capacity to manage multiple functions.

Internal controls

14. There are processes for documenting and reporting to the trustees of the scheme (and in multi-employer CDC schemes, to the scheme proprietor) matters relating to the governance of the scheme.
15. There are robust processes for identifying and addressing any failures in the governance of the scheme.

Statements of aims, objectives and key tasks

16. A statement is provided for each function, setting out the aims, objectives and key tasks to be undertaken. For multi-employer CDC schemes, this statement should be included in the business plan.
17. Key risks are identified and fed into the main risk schedule.
18. There is a plan of work for the year ahead.
19. All subcommittees are identified, and membership and meeting dates identified.
20. It is clear who the decision-makers are and who has to be consulted.
21. The statements:
    1. include the type, source and frequency of management information necessary to enable effective monitoring of each function
    2. reflect the matters identified in the processes module
    3. are reviewed annually and revised as needed

Legal references

¹ Regulation 14 of the 2022 Regulations and Schedule 5 to the 2022 Regulations and 2025 Regulations

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