10 February 2014
The Pensions Regulator has followed up its work on the DC Code and DC Regulatory Guidance with their views on how trustees (both for single- and master-trust vehicles) should assess and communicate their compliance with these initiatives. To recap, the DC Code lays out the legal framework for DC trust-based pensions and provides suggestions of practical guidance on how to comply whereas the DC Regulatory Guidance lays out the Regulator’s view on the quality features underpinning their view of good practice.
The Regulator has laid out 31 key quality features in areas such as trustee knowledge, training and delegations; member value-for-money; investment selection and fitness for purpose; administration; controls and risk management; and communications. They have proposed a useful template that can be used by schemes as a foundation element of the ongoing process to assess their compliance using an augmented traffic light basis (Red, Amber, Green & Purple – is the latter a deliberate Ancient Roman allusion, I wonder?).
The Regulator has also stated their expectation that the results of these reviews should be made available to members and to sponsoring employers in the form of a straightforward governance statement from the 2014/15 scheme year. This will include a general statement of compliance with the DC Code and DC Regulatory Guidance, with additional detail on areas where an alternative approach is taken, where compliance cannot be demonstrated and where the trustees are aiming for best practice.
The Pensions Regulator briefing can be found on their website
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Author: Martin Veasey
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