Default funds, core financial transactions and Trustee Knowledge and Understanding are key highlights in latest TPR guidance
Sackers has commented on The Pensions Regulator (TPR)’s new guidance, ‘a quick guide to the chair’s statement’, published yesterday.
Helen Ball, partner, Sackers, commented: “The new guidance is helpful in demonstrating what TPR’s expectations are of trustees. It is fair to say that this goes beyond the level of detail previously provided in the DC Code and related DC guidance that had been published to date.
“As an example, based on the guidance, three key things to watch out for are:
- Default fund review – the “good” behaviours mentioned by TPR pick up on the need to confirm that, when carrying out the review, trustees take into account the impact of performance on different groups of members and are satisfied that it is on target for all groups. This is something trustee directors may wish to raise with their investment advisers, to make sure they are monitoring and considering investment performance from this perspective.
- Core financial transactions – the “good” behaviours mentioned by TPR refer to daily monitoring of bank accounts, a dedicated contribution processing team and four eyes checking (presumably a safety mechanism) of investment and banking transactions. Trustee directors who have not done so already should consider raising this with their administrators and auditors.
- Trustee knowledge and understanding – the “good” behaviours mentioned by TPR include having a bespoke trustee training plan which is reviewed regularly and a questionnaire to evaluate trustee knowledge.”
Ball added: “Whilst many trustees should be well placed in terms of the work completed on previous chair’s statements, there is no guarantee that TPR will form the opinion that whatever has been included in past statements meets the standards set out in its most recent guidance note. This will be a learning curve for some trustee boards who will find the preparation of the next chair’s annual statement a more detailed process than perhaps originally anticipated.”
To view the guidance in full, click here.