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As trusteeship has become more complicated, the expectations of the Pensions Regulator have become greater, and more than ever there is significant pressure on boards to demonstrate the highest standards of competence.
One consequence of this has been the developing professionalisation of trusteeship. Employers may appoint one or more professional trustees to a scheme’s board or, in some circumstances, appoint a firm to act as its scheme’s sole trustee.
However, another important consideration is that trustees are able to provide evidence of their ability to perform effectively, and the most obvious route to this is through education and training.
Survey reveals surprising attitudes to training
Fifteen years after the Pensions Act 2004 introduced the Trustee Knowledge and Understanding requirements – a statutory requirement for trustees to demonstrate rudimentary competence in their role – it seems incongruous that those who are responsible for scheme governance should place so little value on professional education.
Of those respondents to the mallowstreet survey without any formal professional qualifications, just 31% saw any value in certificates at all.
TPR’s Trustee Toolkit was designed as a free resource which would give all trustees an opportunity to achieve their TKU obligation, and it would be unfortunate if many trustees failed to appreciate the value that it represents.
Nearly a third (30%) of qualified respondents had completed PMI’s Award in Pensions Trusteeship. This is grounds for encouragement; the APT is currently the only formally accredited qualification for trustees, and its completion demonstrates compliance with the TKU requirements.
Clear link between qualifications and demanding roles
Additionally, there is a clear link between qualifications and the more demanding governance roles. Tellingly, professional trustees were the only group among those surveyed to include a cohort with four or more formal qualifications.
Professional trusteeship is a particularly demanding role requiring a number of competencies, and achieving appropriate qualifications is key to the standards required.
New PMI certificate will assess soft skills
The Certificate in Pension Trusteeship will consist of the existing APT plus a new examination designed to assess a candidate’s soft skills.
Whilst this has been developed for the new accreditation requirements for professional trustees, the CPT will be of value to any trustee seeking to demonstrate a level of competence beyond rudimentary technical knowledge.
Formal education, in the form of qualifications and regular training, is vital for trustees if they are to achieve what is demanded of them. mallowstreet’s report makes this crystal clear, and it is right to argue that more emphasis on trustee training is essential.