TPR has published the response to its Future of Trusteeship consultation, saying it will test levels of knowledge and understanding among trustees and lead a new industry working group on diversity, but will not demand a professional trustee on each board. 

David Fairs, executive director of regulatory policy, analysis and advice, introduced the response at the Association of Member Nominated Trustees winter conference on Monday.

He said the regulator had received a record number of responses and, given these, decided not to demand qualifications or CPD for trustees. 

Instead, he said there remain a range of acceptable methods to demonstrate knowledge and understanding, including TPR's trustee toolkit, relevant work experience or other industry-based training, which should be at least 15 hours a year for lay trustees and 25 hours a year for professional trustees.

Regulatory initiative will test trustee knowledge 

 

However, the regulator will review and update its Trustee Knowledge and Understanding code of practice and review the trustee toolkit over this year and next.

TKU requirements will be differentiated both by type of trustee role and type of scheme.

The planned single code - consolidating the current 15 codes into one - "will form the foundation for the review and revision of TKU content, which we hope to consult on in the early part of 2021", said Fairs, and will include ESG and climate change.

Once the new standards are in place, TPR also plans to run a regulatory initiative to test levels of trustee knowledge and understanding, and to consider appropriate action where they fall below expectations.  

  

On diversity, TPR will establish and lead an industry working group to find ways of supporting schemes to take steps to improve trustee diversity.

 

Proposal for mandatory professional trustee on boards dropped 

  

The consultation had asked if it should it be mandatory for pension scheme boards to engage a professional trustee and if governance standards for sole trustees should be strengthened; Fairs said it will not immediately push for new measures.

 

Instead, TPR will support the Association of Professional Pension Trustees’ standards and the upcoming industry accreditation framework for professional trustees, as well as being supportive of the APPT’s intention to develop an industry code for sole trusteeship. 

 
Fairs said while the regulator is not pushing for new rules around professionals and sole trustees, the latter was an area where he had concerns, and "we will continue to monitor standards closely to ensure our expectations for scheme governance are met, and that the right action is taken where schemes do not improve”.  

 

TPR noted that many in the industry also shared their views on DC consolidation. The regulator is "working with the DWP and insurers to create a smoother path to consolidation", said Fairs.

 
While this was not part of the consultation, many lay trustees told the regulator in their response that their employers do not give them enough time to perform their trustee duties, which they have to do in their own time instead.

Fairs said as a result, TPR will start a campaign with the aim of "reminding employers of their duties in law".

Are you satisfied with the regulator's response on trusteeship?

Download the full response below.