Pensions A-Z is a collection of insights to help you further increase your awareness of pensions law.
Search the Pensions A-Z by selecting the first letter of your topic:
Knowledge and understanding: Meeting the test
Trustees should have sufficient knowledge and understanding (TKU) to -
- be confident in their role;
- know their powers, duties and responsibilities;
- know when they need advice and be able to understand and challenge it; and
- recognise conflicts of interest and be able to deal with them.
Knowledge and Understanding
Mirroring much of the Pensions Act 2004, the code of practice (and scope documents) envisage knowledge of -
- trust law; pensions law;
- investment / investment choices and asset classes;
- funding arrangements;
- strategic asset allocation / fund management;
- risk and when to seek advice.
The "conversance" requirements mean that trustees must have a working knowledge of their scheme's trust deed and rules, Statement of Investment Principles, Statement of Funding Principles, and any other document that records the trustees' administrative policies, e.g. trustees' minutes.
Trustees are expected to ensure their TKU remains both fresh and current by reviewing their skills "at least annually" and by filling any gaps.
How do trustees deal with TKU?
- consider offering new trustees pre-appointment training;
- identify gaps in knowledge and bridge with training;
- note roles of sub-committees and consider those skill sets;
- consider using the Pensions Regulator's e-learning programme, "the Trustee Toolkit";
- record trustee training and ensure it is on-going; and
- review at least on an annual basis.
Although there has, as yet, been no move towards formal qualifications, the Pensions Regulator requires trustees to undertake its e-learning programme, "the Trustee Toolkit" (unless they can find a suitable alternative training programme) and trustees would be wise to record any training or seminars they attend.
For more information, please see, Knowledge and Understanding: Basics.
We can offer a comprehensive trustee training programme tailored to meet your scheme needs. For further details, please speak to your usual Sackers contact.
Author: Caroline Legg