What does it mean to be a trustee now and in the future? You’ll have heard us talking over the past 12 months about the 21st century trustee and how we see the role evolving.
21st century trusteeship from our point of view is all about raising standards among trustees so that schemes are better run and members receive good outcomes when they retire.
And what our research boils down to is that there are many good trustees, but there are also many (particularly in small and medium sized schemes) who are still not making the grade.
Our discussion paper on 21st century trusteeship and governance stimulated a dialogue in the industry about how standards of trustee competence could be raised and how the governance and administration of schemes could be improved.
We said at the end of last year that raising trustee standards would be a priority for us, and that we’d set out clearly what we expect of trustees in practice. We kicked this off by producing a new policy after consulting with the industry about the definition of a professional trustee. This, and our accompanying penalties policy, will clarify our likely enforcement action when our standards are not met.
Now we’re telling all trustees that they need to focus on good governance and start with getting the basics right, like completing the scheme return on time, paying their levy on time, producing a good quality chair’s statement (as trustees of a DC scheme), or producing a good quality scheme valuation (as trustees of a DB scheme).
Good governance is the foundation of all well-run schemes and it’s essential to members’ retirement outcomes. It will also save schemes time and money in the long run so it makes sense for trustees to get started as soon as possible.
As we continue to see poor research results in this area, we feel trustees need extra support to meet these basic requirements so we’ve launched a new campaign to address these issues and provide the right help for them. We do understand that running a pension scheme is challenging, and many trustees have limited time to dedicate to their role, so our campaign aims to provide guidance, information and simple tools so trustees are clear about what they need to do, which will ultimately benefit their scheme members. We also want to reiterate to trustees why their role is so important, and how their actions impact on their scheme as a whole.
Now is most certainly the time for trustees to step up to the mark and get to grips with the essential principles of good governance. We’re now being clear that if trustees and scheme managers fail to do even the basics, we will take enforcement action.
Look out for our forthcoming emails and keep on top of the changes we’re making to our website. Some of the topics we’ll be covering include roles and responsibilities, competence, training and managing risk. We’ll be adding new trustee content every month.
By Liz Hickey
Director of Communications