General Code corner
The Code came into force on 28 March 2024. It brings together 10 of TPR’s 16 current codes of practice into new “modules” which are intended to be clearer and more accessible.
Although most of the content is not new, the Code addresses the requirements that apply to TPR, including how trustees should discharge their duty to have an effective system of governance, or ESOG, and the need for certain schemes to carry out own risk assessments, or ORAs.
What is the ESOG?
Occupational pension schemes are required to have an ESOG. An ESOG should include policies and procedures to ensure compliance across the range of topics covered by the Code. The ESOG must be proportionate to the size, nature, scale and complexity of the scheme.
While there are some new expectations under the Code, TPR expects the ESOG to be “predominately a rebadging of things that the governing bodies of well-run schemes should be doing already”.
What is an ORA?
Schemes with 100 or more members that are required to operate an ESOG must carry out an ORA, which is an assessment of how well the ESOG is working and the way potential risks are managed.
The first ORA should be prepared within 12 months after the end of the first scheme year that begins after the Code comes into force, at the earliest. For most schemes this will mean preparing the first ORA in 2026.
What should trustees be doing?
The action to be taken will depend where a scheme is on its governance journey. Some trustees will now be able to put the finishing touches to their processes. Others may need to start a governance review. Speak to your usual Sackers contact about the best way to proceed and for input on any specific questions that you may have.
Blogs
Taking stock on the General Code
Following publication of the final version of TPR’s new general code of practice (the “Code”) in January 2024, the Code came into force on 28 March 2024. Signifying a new era for pension scheme governance and compliance, trustees...
