The Pensions Regulator expects trustees of money purchase schemes to check the quality of the defined contribution schemes they run. In particularly, the Pensions Regulator states that trustees should:
- Assess their scheme against the defined contribution code and regulatory guidance on an ongoing basis. These are underpinned by the 31 DC quality features and can be found in The Pensions Regulator's information on 'Checking you run a quality DC scheme'.
- Use the results of this assessment to publish a governance statement each year.
- Use this assessment as an opportunity to review and refresh systems and controls, monitor risks and prioritise actions.
The Regulator expects trustees to publish their first governance statement at the end of the 2014/15 scheme year, either within the scheme annual report and accounts, on the scheme website, or both.
For final salary schemes governance encompasses trustee, sponsor and advisers roles as well as the relationships between these parties and the behaviours of each and the group as a whole. Our Trustee Polarity framework goes beyond a stewardship review to check whether all required tasks have been carried out and looks into how key decisions have been made and implemented together with whether opportunities exist in the current governance structure to improve the day today running of the scheme and trustee board effectiveness.
Contract based group personal pension schemes (“GPPP”) are not exempt from the need to demonstrate good governance to members. Whilst employers are not legally required to review and monitor GPPPs on an ongoing basis it is good practice and could be key to identifying the key risks to workers’ retirement savings. More details about why setting up an employer management committee to monitor a GPPP can be beneficial can be found in The Pensions Regulator's document on Monitoring your pension scheme - Management committees for employers.
Not only are Mazars experts in advising on how good governance should look, we also have experience of implementing governance solutions, including setting up and defining terms for sub committees as well as producing governance reports for all types of schemes. Examples of projects that we have carried out recently include:
- Helping sponsors understand their schemes and their influence upon them, including explaining balance of powers and current trends
- Reviewing, developing and implementing new governance strategies including new trustee structures
- Setting up and reviewing management committees
- Reviewing third party advisor appointments and making recommendations for added value change
- Providing educational workshops and training