Raising the standards of governance
During 2016 we published a discussion paper on 21st Century Trusteeship and governance. This looked at how we could raise standards among trustees and improve the way that pension schemes are managed.
We also carried out research showing that many pension schemes aren’t meeting the governance standards we expect.
Therefore, we have decided to launch a programme to raise the standards of governance across all pension schemes.
Improving governance in workplace pension schemes
Anthony Raymond, Interim Executive Director of Regulatory Policy, Analysis and Advice, on 21st Century Trusteeship and providing support to trustees so that they can deliver better outcomes for members.
The programme includes a series of communications to make clear what our expectations are on those responsible for managing a scheme effectively. This includes the main things that need to be in place and which will support good decision-making. For example:
- clear roles and responsibilities and clear strategic objectives
- a skilled, engaged and diverse board led by an effective chair
- close relationships with employers, advisers and others involved in running the scheme
- sound structures and processes focused on outcomes
- a robust risk management framework focused on key risks
We are not creating new or higher standards of governance for those running schemes. Rather we are making clearer what we think good governance looks like, and what we will do if we don’t see these standards being met.
Governance,roles and strategy
How trustees need to understand the importance of good governance and starting with the basics.
Make sure you are clear on roles, responsibilities, decision-making, governance structures and processes.
Make sure you have a business plan so that you manage your scheme effectively and get good outcomes for members.
Check governance, roles and strategy for your scheme
Training, skills and advisers
Make sure the trustee board as a whole has the skills, knowledge and understanding to run the pension scheme properly.
Make sure the people on your trustee board have the skills, knowledge and experience to run the scheme well. These skills should work as a whole for the board.
Appoint good quality advisers and service providers, and regularly review and manage their performance.
Check training, skills and advisers for your scheme
Risk and conflicts of interest
Make sure you have effective board meetings and conduct timely decision-making.
Value for members
It’s essential to monitor and record the value the scheme is achieving so you can make informed decisions on behalf of your members.