Regulator finds significant governance gaps between small and large pension schemes
Ref: PN26-20
Small pension schemes have less developed arrangements to spot and manage risks to members' savings, according to new research by The Pensions Regulator (TPR).
The latest report from the regulator found only 27% of small defined contribution (DC) pension schemes have formal governance arrangements in place compared with 94% of large DC schemes and 89% of master trusts.
It is the first time TPR has used a survey to measure trustee governance practices across the market. The new data establishes a baseline as reforms reshape the pensions market and raise the demands of trustee boards.
TPR is calling on trustees to act now to make sure they have the governance, skills and capability needed to make increasingly complex decisions in the interests of members including making active decisions about the future strategic direction of their scheme. This includes consolidation in the interests of members.
The research, conducted independently, with hundreds of trustees across both defined benefit (DB) and defined contribution schemes found:
- Trustee training is widely established across the market, with mandatory training reported by 90% of DB schemes and 77% of DC schemes.
- Larger schemes and those with professional expertise were more likely to achieve higher governance scores.
- Seven in 10 have compared their governance against TPR's general code. The code sets the standards which all trustee boards should follow.
- Trustee boards face conflicting decisions on focus with only 29% of trustee boards saying improving member outcomes was the primary driver of trustee decision-making. While 55% said member outcomes influenced decisions, but they balanced it with other priorities such as regulatory compliance and cost which were equally important.
- And fewer than half of DB and DC schemes, excluding micro schemes, reported having a trustee succession plan, highlighting a gap in planning for future trustee appointments.
TPR says the findings present new expectations for trustees to benchmark their governance against its general code, strengthen succession planning and board development, and ensure governance and risk management arrangements are supporting good outcomes for members.
TPR's Executive Director of Strategy, Policy and Analysis, Richard Knox, said:
"The decisions facing trustees are becoming more complex and consequential. That is why the bar on governance standards is rising. Every trustee board should be asking themselves whether they have the skills and experience needed to make good decisions now and in the future.
"We expect all trustees to review their governance against the general code and keep member outcomes at the centre of their decisions."
TPR will use the survey as a baseline to track how governance develops as the market and regulatory framework change. As part of this, the regulator will be focusing its work on supporting trustees and boards in assessing their skills and competencies as well as developing its understanding of how schemes are using effective systems of governance and own risk assessments to drive improvements in their governance.
Notes to editors
- TPR's trustee survey explored governance, administration and trusteeship practices across UK occupational pension schemes.
- The survey was conducted by independent market research agency OMB Research between 15 January and 6 March 2026.
- The survey sample included micro schemes (fewer than 12 members), small schemes (12-99 members), medium schemes (100-999 members), large schemes (1,000 or more members) and master trusts. The survey data has been weighted by scheme size and type to ensure the findings are representative of the wider in-scope scheme population.
- The survey gathered interview responses from 373 trustees across schemes of different types and sizes, to establish a baseline measure of governance across the market that can be compared across scheme types and sizes and tracked over time. The majority of interviews were conducted by telephone, with interviews for master trusts carried out by senior OMB Research executives.
- Findings outlined in this press release, unless otherwise stated, do not apply to micro schemes, which are for 12 members or less.
- Of those surveyed, 69% of respondents were the chair of the trustee board and 31% were trustees who were not the chair. More than a quarter (28%) were professional trustees.
- TPR's general code came into force on 28 March 2024 and sets out the standards of governance and administration expected of occupational pension schemes.
